• April's freedoms enabled investors to explore other savings vehicles outside of the traditional pension pot
• Year on year, The Share Centre has seen a 16% increase in ISA inflows
• It is encouraging that investors over the age of 55 are demonstrating that they are choosing an ISA over traditional means of saving
Richard Stone, Chief Executive of The Share Centre, looks at investor sentiment following this year's pension freedoms.
"In April of this year we saw considerable changes to private pension legislation, with potentially significant implications for personal investors. Instead of having to conform to traditional means of investing a pension pot at maturity, investors are now able to take control of funds and use vehicles such as personal ISAs with more flexible means of access.
"At The Share Centre, we have seen a 16% increase in those aged 55 and over holding ISA accounts, demonstrating that investors are exploring different savings options and taking an active approach. Furthermore, the value of these accounts has increased by 27% which additionally supports the trend of exploration we have seen since 6 April when the changes were bought in.
"We welcome the Government's initiatives to give investors more freedom as to how they invest their pension savings. It is good to see investors are not being rash and using the opportunity to spend the monies which they can now access; rather investors are taking an active approach to their savings and using self-select accounts to manage their investments, within ISAs where possible.
"We also welcome the Chancellor's announcements in the 2015 Summer Budget including the prospect of a more radical review of the tax treatment of pension contributions and withdrawals which could bring the pension regime into line with the ISA regime. Other changes, for example further reductions in the lifetime allowance, all indicate Government policy is moving toward the ISA being the personal savings vehicle of choice. The pension freedoms have been well publicised in terms of what it means for those at or near retirement age. As important is the message Government policy is sending to those starting out in work and just beginning to think about retirement saving. For those at that significantly earlier stage in life the ISA has to be the vehicle of choice and we believe Government is clearly signalling that to be the case."