Personal pensions rose 18 per cent to £225bn in 1998 from £190bn in 1996 according to the Association of British Insurers.
These figures are supported by the Government Actuary's Department which found that for 1997 total money in funded pensions increased by 18 per cent to £980bn in 1997 from £830bn in 1996.
Over 65 per cent of the money was invested in self-administered, self-invested schemes.
It is estimated that £105bn was invested in occupational pensions.
ABI director general Mark Boleat says: "The continuing high profile debate on the future funding of pensions is pointing towards a greater role for the insurance industry in providing pension products to meet changing consumer needs."