Investing in Retirement has always been the way that pensioners have boosted their income.
However the last few years of record low interest rates has made life very difficult. Savings in ordinary saving accounts are actually depreciating in value as inflation overtakes interest rates.
Many pensioners are facing a dilemma of having to draw savings just to keep their heads above water at the moment.
When considering investing in retirement the majority of us do not want to take any risks with our money.
Many have seen thousands knocked off investments which they relied upon to produce a monthly income, and it has made us all a little more than nervous.
There are so many financial products out there it's difficult to decide on the best course of action that's why it is always wise to take Independent Financial Advice.
A Financial Advisor will assess the amount of risk you can afford to take before advising on which products will suit your investment portfolio.
They are tax free and providing you monitor their performance and switch funds when the interest rates fall, usually with cash Isa's after their initial 12 month term, they can still offer a relatively secure way of saving.
Savers will be able to top up the previous allowance of £10,200 a year which had to be either in an investment Isa or split with £5,100 into a cash Isa and £5,100 into an Investment Isa.
Under the current rules the allowance has been increased to £20,000 for 2017/2018 - all of which can go into a cash Isa.
You can also transfer Isa money whichever way you wish between an investment account to savings account, whereas previously you could only shift it from saving to investments.
Isa rules state you can only contribute to one Isa per tax year.
I know it's still not brilliant but with interest on savings still at an all time low why pay tax on savings if your can avoid it!
The best site for lots of tips and tools for comparing Isa's and other investments is www.thisismoney.co.uk
For those of you who heavily rely on savings for income but are nervous about investing in retirement, you could benefit from an IVPP.
An Immediate Vesting Personal Pension offers a secure fixed income for life in return for your capital. The income will not change if interest rates change and it is not affected by the stock market. You can get tax relief on your contribution of up to 40%.
Anyone between the age of 55-74 can put £3,600 a year into an IVPP and start to receive an income immediately. You can buy one of these even if you are not working. If you are working you can contribute more, upto the full amount you earn.
Anything over £130,000 may affect the amount of tax relief you can claim.
An example of an IVPP for £3,600:
A return of 7% in exchange for your £1,852.
(the income figures quoted are for a 65 year old male before tax, correct as at 12.01.11. The amount you receive may be more or less than this depending on your gender and age. Income will be taxed as PAYE).
Ask your Financial Advisor for more details on these pensions if you would like to include an IVPP in your retirement investments.