Do you want to save more?
Looking at different ways to free up some of your monthly outgoings is a good place to start.
Doing some work on reducing your outgoings could give you the opportunity to save more for your future.
Comparing savings options
A pension isn’t the only way to save for your future – using an ISA could provide an alternative.
The table below show how these options compare.
|How much can I pay in?||As much as you earn, but you generally get tax relief up to the maximum of £40,000 (for tax year 2016/7)||You can pay in up to the maximum annual ISA limit, of £15,240 (for tax year 2016/2017)|
|Can I get tax relief on my payments?||Yes – see above||No|
|Are there restrictions on when I can take the investment?||Yes, you normally can’t access your pension savings until the age of 55||No, you can access your money and make easy withdrawals|
|Can I take some of the proceeds or benefits tax-free?||Yes||Yes|
|Is all of the income or proceeds tax-free?||No||Yes|
|Can the value go up and down?||The value of the investment is not guaranteed and may go up and down depending on investment performance (and currency exchange rates where a fund invests overseas). The value can fall below the amount of contributions paid in||Cash ISA – No but the real value could be eroded if interest is lower than inflation
Stocks and Shares ISA – Yes the level of risk will depend on the investments you choose to put into it
|Are there any charges?||Yes||Cash ISA – No
Stocks and Shares ISA – Yes
|Can other individuals pay money in on my behalf (and benefit from tax relief)?||Yes||No|
Pension vs ISA. What should I do?
Whether you're looking to save into an ISA or a pension, this video highlights the benefits of both to help you make the right decision.