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If you find yourself in
a situation where you have fully funded all the available
pension options in a particular tax year and you still
want to make additional provision for your golden years,
then look no further than the Individual Savings Account
(ISA). This can be an excellent way to save extra funds
for old age, providing tax-efficiency as well as extra
flexibility
'ISAs provide a golden retirement
planning opportunity.'
Tax breaks
As with pension schemes, ISA investors receive tax
breaks. Although you do not receive tax relief on
your contributions, there is no tax to pay on the
proceeds when you later take out your money. In contrast,
most of the income taken from a private pension scheme
is taxable.
Flexible returns
One of the major benefits of an ISA is its flexibility.
You can contribute up to £7,000 a year into a plan
and this limit has recently been extended for a further
five years, this will be reviewed during 2004. Each
year you have the right to invest the full amount,
a smaller sum, or nothing at all and in the future
this money can be switched among a very wide range
of permissible assets. In addition, you can withdraw
your money at any time, although generally after one
year.
Moreover, at retirement, most
personal pension investors will have to buy an annuity
in order to turn their pension fund into a regular
income. If annuity rates happen to be low when they
retire, that's just bad luck. ISA investors have the
option of shifting their funds into a wide range of
possible income-producing assets.
To investigate the possibilities
of building a bigger fund for your golden years by
using an ISA, please
e-mail or contact us for further information.
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