Over a third of savers are using cash ISAs to fund their retirement, according to research by Alliance Trust Savings.

A survey of 1,000 individuals found that 32% have more than £50,000 in savings.

91% said they use cash ISAs to fund their retirement, while 96% in Northern Ireland, Scotland, Wales and West Midlands are likely to hold one.

29% use stocks and shares ISAs with less than 5% of respondents using Help to Buy ISAs to save for retirement.

Further findings:

• 30% in London use cash ISAs for retirement funds
• 32% of Londoners plan to use their savings for a deposit on a house, compared to the national average of 13%.

Sara Wilson, head of platform proposition at Alliance Trust Savings, said:

“Although tax free cash ISAs can be a useful pot for short term or emergency funds, those with longer term plans for their money may suffer by missing out on the greater potential for growth that stock market-based investments can provide.

“With low interest rates and a rising rate of inflation, cash accounts could actually be losing you money, so those with large cash savings should consider moving at least some of their money into a stocks and shares ISA.”