The FSA says that the average investor saving for their retirement would be better off putting their money in ISAs rather than personal pension schemes.
The regulator says that basic-rate taxpayers especially, who wouldn't benefit from the tax breaks offered by personal pensions as would higher earners, would be better off investing in low-cost ISAs.
FSA research conducted indicates that an individual would be 7 per cent better off after 25 years if they invested in an ISA than they would be using a personal pension. The findings use an average 7 per cent annual return in both cases.
The report went on to estimate that only those individuals who pay into their personal pensions for their duration are likely to benefit. It put this figure at only 15 per cent.