According to a survey by The Share Centre, one in four people with more than £10,000 worth of investments has replaced their private pension with a stocks and shares ISA since April 2014.

The study of over 1,000 investors aged 18-75 found that 27% use ISAs to build up a holiday pot while 21% plan to use the investments to fund school and university fees.

The Share Centre believes more people are turning to stocks and shares ISAs because they offer greater flexibility in terms of accessing money. Investors can access their ISAs whenever and however they want. Pension money, on the other hand, is tied up until 55.

The study also noted that increased flexibility and access to long-term savings is “stronger than ever”, especially in light of the pension freedom reforms.

Since the freedoms, which give retirees full access to their pension pot, were introduced in April 2015, The Share Centre has witnessed a boost in ISA sales, with inflows up 11% year-on-year.

The death of the private pension?

Richard Stone, chief executive of The Share Centre, said: “We may be seeing the beginning of the death of the private pension. While the taxable benefits of a pension cannot be argued with, many may now be viewing their workplace pension as the only pension vehicle they need in their life.

“Auto-enrolment is now rolling out across the UK and the government has signalled through upcoming changes to the tax system that the ISA will be the preferred vehicle of choice for long-term savings. These changes include £1,000 of tax free interest income, the £5,000 Dividend Allowance, substantially reduced caps on pension contributions and the lifetime allowance.”