Isas are being used by 37 per cent of UK adults to save for retirement, rising to 62 per cent for those aged 55-64.
Data from LV found 77 per cent of UK adults aged 25-44 are interested in a stocks and shares Isa with smoothing elements to alleviate day-to-day stock market volatility and deliver strong returns.
It also revealed 10 per cent of adults were using their Isa towards a mortgage deposit while another 10 per cent were planning to use theirs to gift money to family members.
According to LV, men are 11 per cent more likely to be saving in their Isa for retirement than women.
Adults in younger age brackets were also more likely to be using Isa savings for reasons other than retirement saving, with 26 per cent of 18 to 34-year-olds saying they intended to use their savings for a deposit on a home.
Gwen Haggo, sales director at LV, said: “Interest rates are presently much more favourable for savers when compared to recent years. However, there is no guarantee that this will continue indefinitely.
“When approaching retirement, it can often be worthwhile to consider spending some non-pension assets first, which can also help reduce the estate for inheritance tax purposes."
"It could also help to maximise the amount of wealth available to pass on to loved ones later by not dipping into pension assets until it is necessary.”
This comes after only 8 per cent of IFAs said they saw an increase in clients paying into Isas, despite the April rule change.
In the Autumn Statement, previous chancellor Jeremy Hunt announced changes that would allow savers to pay into more than one of each type of Isa annually.
Research by Opinium found despite this, the majority of advisers (87 per cent) reported there had been no change in terms of their clients paying into Isas in this period.
alina.khan@ft.com
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