ISAs v Pensions: The Official Retirement Debate

dunstonh

So I would go ISA any day and protect the family

I would have thought pension for the reasons you quoted. On death the full fund value of the pension is paid out. Assuming same investments, the pension fund would be 22% higher (basic rate 07/08).

Arthurian

I like UptheCreek's idea of having ISAs there if private health care is needed. I hate to think how the NHS is going to cope in 10, 20 and 30 years' time.

dunstonh

Arthurian wrote: »

I like UptheCreek's idea of having ISAs there if private health care is needed. I hate to think how the NHS is going to cope in 10, 20 and 30 years' time.

If means testing does go that far and matches current rules then money in an ISA would be included in the means test but money in the pension wouldnt.

EdInvestor

Of course all the actual statistics show that life expectancy is increasing, not decreasing.

XRAT

jamesd wrote: »

'However, do note that "income you may have deprived yourself of for the purpose of getting a tax credit or more tax credit" may be counted. I don't have the experience of how this is applied in practice...'

Guys, if it helps, I earned over the 'Child Tax Credits' limit in '06 and made a pension contribution of £5,000, to bring me back under the limit.

I recieved a 40% tax refund and was able to claim the Child Tax Credits too (which equated to about another 10%).

dunstonh

I recieved a 40% tax refund and was able to claim the Child Tax Credits too (which equated to about another 10%).

Thank you. For so long I have been saying it but its nice to have someone post a real world example.

XRAT

dunstonh,

It's my pleasure, it's nice to give something back!
Having waded through this thread.., like 24,072 others, I've learnt a lot from you all. Thank you.
However, rather than take a degree in investing..., how about a flow chart for us thickies??

Please, keep up the good work.

TREVORCOLMAN

XRAT wrote: »

dunstonh,

It's my pleasure, it's nice to give something back!
Having waded through this thread.., like 24,072 others, I've learnt a lot from you all. Thank you.
However, rather than take a degree in investing..., how about a flow chart for us thickies??

Please, keep up the good work.

Just send the money to us and we will spend it for you also!

anilkumar3

dunstonh wrote: »

When we talk about ISAs on the pensions front we refer to stocks and shares ISAs.

Cash ISAs are not suitable retirement planning vehicles as they are no good for long term planning.

Cash ISAs are not suitable retirement planning vehicles as they are no good for long term planning.

Please could you explain why ?

Thank you

dunstonh

Please could you explain why ?

Historically cash just about keeps up with inflation. So with long term planning over 20 years or more then cash isnt really going to get any more growth and therefore you have to pay that much more into a cash ISA to compensate for that. Its fine in the shorter term.

Someone in their 20s can double their retirement income on just 2% difference a year in the returns. Going with cash for 100% would harm their retirement income.