"Previous generations typically spent 10 to 15 years in retirement but current life expectancy for a man at state pension age is 21 years, which means many may live for 30 years or more in retirement."
Another way to encourage longer term saving could be to link ISAs and pensions, suggests Fidelity International, by linking the new £50,000 annual pension limit and the ISA limit of £10,680 to form a single annual tax-advantaged savings limit.
Up to £30,000 per year could be placed in the ISA, and the remainder in the pension. At any point, when an individual feels comfortable not having access to their savings until retirement, they could transfer their ISA savings into the pension, netting tax relief. "Behavioural economics research shows that if you want to get investors to take an interest in long-term savings, you have to make it very, very easy for them," agrees Tom McPhail, head of pensions research at financial adviser Hargreaves Lansdown.
"Every time you introduce a pointless bureaucratic rule it just puts people off. If the Treasury allowed investment assets to be moved between different tax shelters it would help reinvigorate retirement saving at no cost to the taxpayer."
It is getting easier and IFA’s can make it even easier to make sure your savings are working for you for as long as you may need them to.
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