The nationwide research from Octopus Investments also reveals huge regional discrepancies as to how people plan to invest their money this year. People in the south west of England are most intent on using their full ISA allowance (31%), but in Wales and the North only around one in 10 people have plans to do the same.
The Octopus research also shows those in the East Midlands are most likely (68%) to invest this year, while those in the North and Wales are the least likely - although over 50% of people in these regions still said they will commit money to investments this year.
However, this appetite to invest across the UK masks the fact that many of these investors are failing to prioritise their retirement, despite the pension reforms giving people greater access to their pension savings and flexibility as to how they use them.
For example, while those in the East Midlands are most likely to invest, just 7% will focus on retirement planning this year – one of the lowest figures for any region. Londoners are most likely to say they’ll take time to sort out their retirement planning in 2015 (15%), but in the East and the North, only one in 20 people plan to address this important issue this year.
The research also revealed that the size of a household can have a direct bearing on how smart investors are with their money. While smaller families are slightly more inclined to invest – and tend to go for the obvious choice and commit to an ISA – it is larger families that are twice as likely to look at tax efficient investment options beyond the standard ISA (20% compared to 10% for families with no children).
Simon Rogerson, CEO and co-founder of Octopus Investments, said:
“It’s great so many people are starting the new year with plans to invest, but with changes to retirement planning and new limits on ISAs due in the spring, not to mention a host of other tax efficient opportunities to explore, it is a concern that so few people intend to take a fresh look at their investment planning.
"With tax year end fast approaching, now is a good time for people to speak to a financial adviser to be sure they are aware of all the options that are open to them so they can plan with confidence for the future and ensure that their investments work hard for them and really make a difference."
Neil Buckland, Head of Sales at Octopus, said:
“With the latest pension reforms coming into effect in April, we’re on the brink of entering into a new retirement world. While the changes make retirement planning a far more complex issue for investors, there is also a real opportunity for investors with the right support to get back into the driving seat and take control of their savings for the future. That’s why it is surprising that so few people across the country are planning to take the time to address their retirement planning this year. What’s more, only 10% of people surveyed are more likely to seek financial advice on the options available to them.
"There is a significant percentage of the population who need guidance to help them navigate through this new world and make their money work more effectively for their retirement. Encouraging more people to seek advice is key and there is clearly a real opportunity for advisers to open up the conversation with people about the different solutions available to them to support their retirement plans. With annuities no longer holding court as the default option for income drawdown in retirement, it’s necessary for advisers to help clients understand the full range of tax-efficient investments available to them that can complement existing pension arrangements.”
