ISAs v Pensions: The Official Retirement Debate

grey_gym_sock

for ppl with no tendency to over-spend, there is no advantage to being prevented from dipping into the capital, because they wouldn't do it anyway.

on the other hand, the disadvantages of GAD restrictions, and inability to take anything before 55, apply to everybody.

atush

Very good points.

But:

for ppl with no tendency to over-spend, there is no advantage to being prevented from dipping into the capital, because they wouldn't do it anyway.

people may not overspend. but if SE, a company could fail leaving you to owe money or in fact be sued by someone.

So you may not overspend, but 100% ISA is exposed to both personal liability and court judgments as well as means testing.

grey_gym_sock

yes, means testing is relevant to some ppl.

i think personal liability is less likely to come into it. if your business has large potential liabilities, you'd do better to take out insurance for that.

atush

I agree, but a lot of self traders don't bother. Nor do they bother setting up a Limited Co.

BerlinWall

I see many replies on this thread looking at various tax positions. I think realistically tax rules will change over time and it is not the case that what is relevant to today's pensioners will still be in 20 years time.
So instead of over-focusing on the difficult projections, why not concentrate on the aspects savers can control. Contributions and costs.
1. Look to increase contributions
2. Cut costs. Shop around and compare. Ask your mates. Cost is the one consistent element (both for pensions and ISAs) that directly impacts your retirement income regardless of anything else!

dunstonh

I see many replies on this thread looking at various tax positions. I think realistically tax rules will change over time and it is not the case that what is relevant to today's pensioners will still be in 20 years time.

This is why you keep it under review. However, things like personal allowance get increased most years.

1. Look to increase contributions

..into either pension or S&S ISA depending on which is best for the individual.

2. Cut costs. Shop around and compare. Ask your mates. Cost is the one consistent element (both for pensions and ISAs) that directly impacts your retirement income regardless of anything else!

If your mate has made a mess of it and you ask them then you will make a mess of it too if you follow what they have done.

Charges are important but they are not a primary consideration. Costs can be the same on pensions and ISAs. So, its not really applicable to this thread. The whole point of this thread is to provide the info on the two options and where the pros/cons are and which can be best for someone.

atush

that made no sense, and has nothing to do with pensions.

So, type up something in word, use your native language. Then go to Google translate and translate into english. Then post in the relevant forum (ie debt, savings, pensions etc)

Jase_from_Up_North

Secret_Wookie wrote: »

Heres something to think about when planning on how to fund retirement...

2/3rds of all the people who have ever lived to the age of 65 are alive today!

Also the maximum age of the human body is currently estimated at somewhere between 120-140 years.

Who reckons any government knows how to deal with this over the next 50 years?

Government pensions today . . . Government pensions historically ?

Theres a yardstick for the future

mumf

dunstonh wrote: »

This is why you keep it under review. However, things like personal allowance get increased most years.



..into either pension or S&S ISA depending on which is best for the individual.



If your mate has made a mess of it and you ask them then you will make a mess of it too if you follow what they have done.

Charges are important but they are not a primary consideration. Costs can be the same on pensions and ISAs. So, its not really applicable to this thread. The whole point of this thread is to provide the info on the two options and where the pros/cons are and which can be best for someone.

Why are charges not important? Surely they impact on the overalll value of any savings?
You state that you are a IFA. You charge for advice so why would you say this is not an important consideration?

omits

Well, it's a pity everyone does not realise what a scam the investment industry is. However you must take into account the tax relief on your contributions to arrive at comparisons. Note also that if you invest yourself the capital is yours as well! When I was made redundant (at 54!) I had a company pension and I took as much capital up front and front loaded it so at 65 it reduced to allow for that. This way I got as much of the capital back before I pass on.

The investment industry takes all it's "commissions" up front even if it looses your money. Like the banks they reward themselves for potentially doing nothing.