Isas 'can be a good for retirement income'

Fri 19 Feb 2010 - Published in Banking

Isas could offer a good alternative to pensions, according to a financial expert.

Recent figures from Halifax showed that the number of Isa accounts in the UK has grown by 53 per cent in the past ten years.

Commenting on the finding, The Motley Fool director David Kuo said people are probably using the products to reduce the amount of tax they are paying and said they could be especially useful for those approaching retirement.

"Pensions used to be the savings scheme of choice for many people planning their retirement. But changes to the age when people can draw their private pension has dented investor sentiment," he continued.

Mr Kuo explained that from April 6th this year, the age people at which
can access their pension will rise from 50 to 55 and claimed Isas avoid this problem, as they can be drawn out of at any time.

The Halifax report also showed that 37 per cent of UK households currently have an Isa, with growth highest among the under 25s.

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