Pensions and ISAs
With longer life expectancies many investors are concerned about
their retirement income. Some are now looking to boost their pension
funds, either by topping up company schemes, or by using alternative
vehicles. One such vehicle is the Individual Savings Account (ISA) which
can help to ensure your retirement income is as healthy as possible.
ISAs and pension plans are both seen as tax efficient investment vehicles. however, there are big differences between the two. For example, when you put money into your pension plan, the contribution qualifies for a tax rebate up to your highest rate which, for a higher rate taxpayer, can add a significant amount to their investment. However, in exchange for this benefit, you must keep your money invested until at least age 55, and on retirement, the income you receive is taxable, and counts towards your personal allowances.
With an ISA, the money you invest comes from taxed income and no rebate will be given. However, ISAs have no minimum term - so you can withdraw the proceeds or an income before you reach 55. In addition, any income you do withdraw will be tax free and will not count towards any personal allowances. Which approach is best for you depends entirely on your personal situation. Call us if you would like to find out more.
In This Issue
- Editor's Note
- Employee Focus
- Credit Fall Out
- Use It or Lose It
- Pensions & ISAs
- Did You Know?
- Start Early
- Are ISAs Tax Free