ISAs v Pensions: The Official Retirement Debate

jamesd

There's even room for debate when an employer is matching funds. But the right answer will usually be to accept the money, until barred by law or common sense (flexible drawdown, exceeding lifetime allowance).

I've had employers for one job that paid none of the employer NI or paid half of it. And same job, that did no salary sacrifice then salary sacrifice. Salary sacrifice is the easy way to get immediate 40% tax relief but adjusting tax codes works as well.

For the tax relief the question is whether the tax return means you can take enough income, compared to the same money in an ISA, and if the restrictions are acceptable. GAD is a limit but 40% tax relief is a significant increase in the GAD limit's real value. Not high enough in the stage of drawdown before the state pensions start, I think, but it may be enough for some.

The right answer is often going to be a mixture. Say taking 40% or salary sacrifice pension contributions or employer matching and also using ISA and non-ISA investing to allow drawing down of enough capital. And this sort of thing also protects against some legislative risks, like increase or decrease in tax rates.

Paul_Herring

fairleads wrote: »

And only an amateur, or a vested interest, would conclude that the debate included an employer funded pension because experienced investors realise that that option reins supreme over all others. And so there would be no debate.

Why shouldn't employer contributions be included in the debate?

fairleads

jem16 wrote: »

Far from irrelevant unless you consider actually answering a question put to you as irrelevant. Tax in retirement cannot always be avoided but it can be mitigated.



Only for those who have no answers.

Once again you don't respond to questions put directly to you. Waste of time really.

The reason for me not responding is that your replies are not spontaneous enough. Witness the 5 day gap. Therefore it's my belief that you are not fully au fait with the numbers. Maybe your back room boys are providing the info. I am however flattered that you have chosen to include some of the Isa into your last comment.

fairleads

Paul_Herring wrote: »

Why shouldn't employer contributions be included in the debate?

Ok will do, but why stop at that. If we're looking for the best and most tax friendly method of funding retirement it has to be, or rather has been, trading up our primary residence and banking the profit each time. And next best is, or again was, BTL.

Have a bit of tax free work in the pipeline for to-day so probably only respond further tomorrow.
Regards

jem16

fairleads wrote: »

The reason for me not responding is that your replies are not spontaneous enough. Witness the 5 day gap.

It took you almost 3 days to reply to my post. (That included one deleted post from Saturday)

Therefore it's my belief that you are not fully au fait with the numbers.

Wrong again.

Maybe your back room boys are providing the info.

Wrong again. Although I do wonder who you think I am.

I am however flattered that you have chosen to include some of the Isa into your last comment.

So you believe the ISA to be a waste of time - that's a shame really. I believe it's an integral part of retirement planning along with pensions, unwrapped investments and cash.

Paul_Herring

fairleads wrote: »

Ok will do, but why stop at that.

Because you're getting silly...

If we're looking for the best and most tax friendly method of funding retirement it has to be, or rather has been, trading up our primary residence and banking the profit each time. And next best is, or again was, BTL.

Because they aren't ISAs or Pension funds.

Employer contributions into a pension fund is a legitimate subject in this thread. Stuffing your money into a stagnant housing market, not so much.

fairleads

Paul_Herring wrote: »

Because you're getting silly...

.

In that case I won't waste any more of my time. Because no one here is in the same position as me - retired. Therefore all replies to me are not based on experience born of facts, but rather projections. cheers

jem16

fairleads wrote: »

In that case I won't waste any more of my time.

Avoidance tactics again.

Therefore all replies to me are not based on experience born of facts, but rather projections. cheers

Your posts decry the use of a pension which is based, not on fact, but what you have managed to gleam from websites and out-of-date thoughts. You are also projecting that you will have enough income until you (and your wife?) die.

So give us your facts based on your experience so far.

fairleads

jem16 wrote: »

Avoidance tactics again.



Your posts decry the use of a pension which is based, not on fact, but what you have managed to gleam from websites and out-of-date thoughts. You are also projecting that you will have enough income until you (and your wife?) die.

So give us your facts based on your experience so far.

Maybe, but first ask your back room boys how they arrived at Mr MSE's pension and Isa pots. I know they mightn't consider it important, but it would help if they provide a few crumbs such as

Initial contribution into each fund
Number of contributing years for each fund
Total contributing years
Inflation rate
Annual rate of return applied to each fund
Just a thought...
Thanks

jem16

fairleads wrote: »

Maybe,

Avoidance tactics again.

but first ask your back room boys how they arrived at Mr MSE's pension and Isa pots.

Ok - I have checked my back room (or living room) and my front room ( my lounge), I have even checked my kitchen, bedrooms and bathroom just in case they are hiding there. However I can't find anyone - who should I ask now?

I know they mightn't consider it important, but it would help if they provide a few crumbs such as

Initial contribution into each fund
Number of contributing years for each fund
Total contributing years
Inflation rate
Annual rate of return applied to each fund
Just a thought...
Thanks

Finally I found someone to ask - Mr A and Mr B!

They said - "We haven't a clue - this bloke on the internet made us up! He sounds a wee bit like Mr MSE though so maybe you could try him."

Now perhaps you could give us your facts..............