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Survey predicts low uptake for Isas

Only 20 per cent of eligible Isa investors plan to make use of their allowance this year, according to research by Royal & Sun Alliance Investments.

The survey, conducted by Mori, found that 77 per cent of people have no plans to invest in an Isa, a trend which R&SA believes results from a lack of confidence in the markets.

Those most motivated to save are the 55to 64-year-olds and the 25to 34-year-olds, with 25 and 24 per cent respectively saying they will invest this Isa season.

This contrasts strongly with those aged 16 to 24, of whom only 14 per cent have any intention to save.

The oldest age group surveyed, those aged 65 and over, are most likely to invest a lump sum, at 86 per cent compared with 27 per cent of 25to 34-year-olds. This is probably a result of older people&#39s disposable incomes, according to the survey.

R&SA conducted the survey to show the value of saving for retirement outside of a pension, especially at times of low annuity rates.

Referring to IFA Bestinvest&#39s new online retirement income calculator, R&SA says a 25-year-old would have to generate a fund of at least £500,000 to retire on half their salary by the age of 65.

The Mori telephone survey interviewed 1,009 people between February 1 and 3.

R&SA Investments director of retail funds William Russell says: “The level of contribution that this requires is pie in the sky for most of us in the UK. But this is largely due to the fact that annuity rates are at historic lows.

“One of the few options open to investors is to try and maximise the value of the savings they hold outside the pension regime.”

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