A growing number of people are becoming aware of the need to put aside money to fund their retirement. The question is, what's the best method to save money for retirement? There are a variety of methods that you could use, and all of them have advantages. The two most sought-after are personal pensions or an ISA.
- You can put aside as much as PS11,280 (2012/13) every tax year in an ISA.
- There isn't a tax rebate offered on investment in an ISA.
- Any gains earned from investments made within your ISA are completely exempt from tax on capital gains. You can read more about lifetime ISA at foxgroveassociates.co.uk/individual-clients/savings-investment/lifetime-isa.
- It is possible to invest in a range of investments provided you have an ISA by partnering with a reliable service. This includes unit trusts, shares, investment trusts, ETFs, gilts, and bonds.
Personal Pension Plan
- The government will pay an income tax deduction directly into your pension each time you contribute. This is a great opportunity to see your savings rise in value in a matter of minutes.
- You could also claim a tax credit on an income tax form if you are a higher-rate taxpayer which contributes to a pension more appealing.
This will help you determine the best option for you.