Pensions or ISA

milliemillie_2

Decided really must get our finances sorted out.

Simple question (I Hope) we are in our mid 40s. Should we be topping up my husbands pension (he pays 40 per cent tax) with AVCs or putting our money into ISAs to get the best return.


P.S. sorry if this has gone in twice, got a bit confused

dunstonh

Pensions vs ISAs will not result in a definitive answer. Each has it's pros and cons which could sway you one way or the other.

AVCs, on the other hand are basically going obsolete from April and whether you should do one now will very much depend on the quality of the AVC being issued. AVCs are also useless for people planning early retirement (although to be honest, I do not know if that is being relaxed after April or not under the new rules - Not seen anything suggesting it either way).

He may be better off with personal pensions than an AVC or FSAVC. He may be better off with buying added years, if that is an option available. He may be better off with an ISA. It may be better to have the pension contributions in your name, even if that means losing the higher rate tax relief (if you have no pensions, then almost certainly it will be). If you are in receipt of working/childrens tax credits then pensions can increase those but ISAs cannot.