ISAs - A Useful Alternative

When you start to plan for your retirement, you do not have to do all your saving through a pension. Individual Savings Accounts - or ISAs - provide a useful alternative.

ISAs (Individual Savings Accounts) were introduced by the government in 1999 to replace PEPs and TESSAs. They represent one of the few tax-breaks available to savers who pay income tax.

You can take out EITHER one maxi ISA, in which you can invest up to £7,000 all in stocks and shares or split between the three components with a maximum of £3,000 in cash and £1,000 in life insurance, OR up to three mini ISAs with up to £3,000 in one mini cash ISA, up to £3,000 in one mini shares ISA and up to £1,000 in a mini insurance ISA.

You cannot take out both a maxi ISA and a mini ISA in the same tax year, nor can you have two mini ISAs of the same type (such as two mini cash ISAs).

Mini cash ISAs provide combined benefits of tax exempt interest and instant access. Maxi equity or 'stocks and shares' ISAs provide the opportunity to invest in the stockmarket with returns which are free of tax.

ISAs for retirement

One key difference between a conventional pension and saving via an ISA is when you get your tax benefit. With a pension, you make contributions out of your pre-tax earnings, but get taxed on the income when you draw your pension. With an ISA, you contribute out of your post-tax earnings, but get tax benefits on any income that you take from it. However, in most cases your income (and therefore tax rate) in retirement is likely to be lower. So, if you are a higher rate taxpayer now but expect to be a basic rate taxpayer in retirement, the pension route has a slight tax advantage. Also, if you lost your job, you would have to use up most of your non-pension savings before you qualified for any welfare benefits. The contribution levels for pensions are also higher than for ISAs.

On the plus side, ISAs often have lower charges than pensions, although stakeholder pensions have bridged this gap. There is also the key issue of access to your money. With a traditional pension you cannot touch the cash that you pay into it until you reach the age of 50 (gradually rising to 55 with effect from April 2006). Most of the fund then has to be used to buy an annuity which provides you with annual income for life. Once you have taken out an annuity, you cannot pass your pension fund onto your heirs. However, had you saved in ISAs, whatever remained upon your death could be passed on. Of course you need to exercise discipline if you put retirement savings into an ISA - make sure easy access does lead you to spend the lot.

Please enter your details below to request your FREE information.

ISAs (Individual Saving Accounts)		Select
	The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. We are one of the UK’s top 50 FTSE quoted companies, with a range of investment opportunities, including ISAs and unit trusts. So whether you’re the cautious type or more of a risk-taker, we’ll have the investment fund that’s right for you. Simply request a brochure today to find out more. Issued and approved by Legal & General (Portfolio Management Services) Limited
Risk Warnings Hide Risk Warnings RISK WARNINGS The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

Investment Trust ISAs		Select
	Looking for something different for your ISA this tax year? With a range of 13 investment trusts for you to choose from, whether you want to invest in something more adventurous - like Asian tiger economies or European private equity, or you’re after greater diversification with a core UK or global trust, we have an option to suit. And as F&C is one of the UK’s largest investment trust managers, we know a thing or two about discovering good investment opportunities. Issued and approved by F&C Management Limited
Risk Warnings Hide Risk Warnings RISK WARNINGS The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

Property Funds		Select
	The Legal & General group, established in 1836, is one of the UK’s leading financial services companies and we are one of the UK’s top 50 FTSE quoted companies. If you are looking to invest in UK commercial property within your ISA, you maybe interested in our UK Property Trust. Find out more now and request a brochure. Issued and approved by Legal & General (Portfolio Management Services) Limited
Risk Warnings Hide Risk Warnings RISK WARNINGS The content relating to the past performance of an investment is not necessarily a guide to its performance in the future. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The degree of fluctuation of fund values varies significantly and the value of higher volatility funds may change suddenly. The value of investments may rise or fall due to the volatility of world markets, interest rates and capital values or, for investments held in overseas markets, changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. The levels and bases of, and reliefs from, taxation are subject to change as UK legislation and regulations and the UK tax regime are amended from time to time and any content on this site referring to such legislation, regulations or tax regime should not be relied upon. All content provided through this site is only for your personal information and use, and is not intended to address your particular requirements or to be relied upon in making (or refraining from making) any specific investment or other decision. Dianomi Limited's content shall not constitute any form of advice or recommendation by us. Where you are unsure about any specific investment or other decision, you should obtain appropriate expert independent advice. Nothing included in this site constitutes an offer or solicitation to sell investments to anyone in any jurisdiction outside the United Kingdom in which such offer, solicitation or distribution would be unlawful. For further information on the rights and obligations of both you and us in relation to the use of this site please refer to Dianomi Limited's General Site Conditions which you agreed to when you accessed and used this site.

Your details
First / Last Name *	Mr Mrs Miss Ms. Dr. Revd. Prof. Lord Lady Other
Postcode *
Address *
Town / City *
Country	United Kingdom (Offer only available to UK residents)
Email Address  *	(required to verify receipt of information)
Telephone *
Date of Birth	(DD/MM/YYYY)
	I would like to receive more information from Dianomi Ltd and the parties I have selected by post  by email

 

We value your privacy.
Dianomi Ltd is a registered member of the Direct Marketing Association.