For flexibility, try saving into a pension and an ISA

MORE than a third of savers are planning to rely on ISAs for most of their retirement income.

But there’s a lack of awareness of options as two-thirds choose cash ISAs despite more than half being unhappy with the rates, according to insurance and annuity provider MetLife.

It’s understandable people are wary of stocks and shares ISAs when markets are volatile. But there are products giving some certainty over ISA investments with guarantees of either a lump sum or income at the end of a chosen term. Savers need to check they understand what they could pay in, compared to how much they will be guaranteed to get out – as it may not be the full amount invested, compared to risk-free low-interest cash ISAs.

ISAs are a good way to save and boost retirement income without any tax issues. But savers need to ensure they’re not missing out on tax relief and contributions from their boss that will boost savings, by opting for an ISA instead of a workplace pension.

Saving into pension and ISAs can offer more flexibility during retirement.