Figures suggest that wealthy people are far more likely to invest in a pension than those on more modest incomes, and this is hardly surprising says Chris Gilchrist from EveryInvestor.

Those with plenty of money are not concerned about having some of it locked away in a pension fund, but when you have not got as much to play with, having access to it and being able to move it to better investments later on is more important.

“Rich people with plenty of capital can afford to give up access and flexibility on some of their money, so it is quite rational for them to invest lump sums in pension plans,” Mr Gilchrist explains.

“But exactly the same logic explains why most standard rate taxpayers don’t put lump sums into pensions.”

Instead, he recommends, those paying standard rate tax should save using ISAs as much as possible as this is likely to offer tax benefits and the flexibility many savers want.

Baring Asset Management recently reported a significant number of people have bever reviewed their retirement plans.

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