Those investing in equities have had a difficult few years; "shocks and scares, rather than stocks and shares", as one commentator put it.

But, while nobody realistically thinks that we are in for a return to the sustained period of growth experienced in the 1980s and late 1990s, there could still be scope for long-term growth.

The main point, however, is that investors whether putting their money into equities, property, or other forms of asset must be prepared for a degree of volatility.

Prices have grown over the last two years, although the FTSE100 is still well below its high of 6930.2 at the end of December 1999.

Many would argue that the market was then overpriced and a return to such high levels is unsustainable; and this may well be true for the next few years.

However, a more gradual rate of growth-supported by solid economic foundations-could offer equity investors a far profitable long term.

More importantly, as the recent Pension Commission report clearly indicates, there is a massive gap in pension provision within the UK, which needs to be made good; and the government simply cannot afford to make up the shortfall.

Already the value of the basic State Pension is linked to inflation, rather than average earnings, thus reducing its effective value compared with wages.

It is likely that, as the proportion of those in work compared with those claiming benefits continues to fall, the value of State benefits will reduce even further.

Of course, planning for retirement is not just about pensions, it can involve a wide range of different ways of saving for the future, some of which may not be available-at least to the extent they currently are-for long.

At one end of the spectrum are the high risk Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs), both of which were granted temporary enhancements in the last budget. But for the majority of investors, the tax efficiency of Individual Savings Accounts (ISAs), which have been around since 1999, offers far greater flexibility, in practice.

ISAs can currently accept investments of up to £7,000 per person each year, invested all in equities or, in its Maxi-ISA guise, up to £1,000 can be invested in life assurance and up to £3,000 in cash.

This means that a husband and wife can invest as much as £14,000 a year in an account that attracts no tax (although it is no longer possible to recover the 10p tax deducted from every pound of UK dividend income) and the cash or an income can be drawn tax free, when required.

So looking at maximising the amount invested in ISAs now and next year could well be worthwhile. But it is also important to ensure that your investments match your short-term as well as medium to longer-term needs. This means ensuring that there is a balance of asset classes, some of which are available to meet day-to-day needs and emergencies, while those intended to provide lumps sums and income in the future are geared towards assets that are likely to provide longer-term growth potential.

E-mail: enquiries@sagegroup.co.uk or visit: www.sagegroup.co.uk Sage Financial Management Limited is authorised and regulated by the Financial Services Authority.