ISA vs Pension – which is best?
ISAs (Individual Savings Accounts) are a popular way to save. They are after all tax efficient and opportunities to be able to access your savings is appealing. Whilst the additional tax-relief available with pensions has longer term benefits, this money can only be accessed once you reach age 55.
ISAs and pensions are two separate products but they can also be used alongside each other. For example, you receive tax relief on contributions into your pension, not with an ISA and you cannot take benefits from your pension until aged 55, whereas ISA you can access any time.
Whether you are already paying into an ISA and/or a pension, it may be worth finding out about your options and seeing whether they can be more aligned. To help maximise your retirement savings.
Did you know the ISA allowance is now £20,000 per annum? Add that to the annual allowance for pension contributions of up to £40,000. That’s a combined allowance of £60,000 that can be used to reduce your tax burden and to build up a worthwhile retirement fund.
Although, you may think retirement is a long way off for it’s important that you make the most of your opportunities now and build up sufficient savings to support you through your retirement.