Almost half (45 per cent) of consumers are using a savings account to save for retirement, with a “concerning” 25 per cent using a cash ISA, according to research from Barnett Waddingham.

Particular concerns were raised around younger savers, as the survey found that 21 per cent of 18-34 year olds are using a cash ISA, while 12 per cent are using cryptocurrency to save for retirement, compared to the UK average of 5 per cent.

A gender gap was also identified, as men were twice as likely as women to be using a stocks and shares ISA to save for retirement, at 22 per cent compared to 12 per cent.

Despite savers' seeming preference, Barnett Waddingham pointed out that UK equities have consistently outperformed cash over the past 20 years, as has a standard defined contribution (DC) pension portfolio.

In light of this, Barnett Waddingham partner and head of DC, Mark Futcher, argued that it is "vital" that savers pay attention not just to what they’re saving for retirement, but how and where too.

He continued: "Squirreling away money for retirement into a cash savings account might feel safe, but the reality of the inflationary environment is that it could be falling in ‘real terms’ by as much as 8 per cent or 9 per cent.

"That’s not a performance people would accept from any other asset class; risk changes over time, and equities are less ‘risky’ in the long term than the short term.

“For those unsure where to save, there are many excellent sources of advice. Good employers will have a vested interest in your financial wellbeing; it’s worth speaking to them about accessing financial guidance.

"Alternatively, financial advisers, money advice charities, and government initiatives like Money Helper can help point people in the right direction.”

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