More money/investing Issues

jj_5

atush wrote: »

I would say, as she has no pension, she should put 15K into a pension this year. This will mean an initial fund of 18,750 into a pension.

This leaves over 30K to invest in ISAs, and other cash and investments. Or she could use last year's allowance and put 30K into the pension and have 37.5 as an initial fund and put the rest in ISAs.

Who does she work for? From this year, most employers have to start a pension scheme and contribute (or will do in the next 3 years).

In the meantime, pensions will be good for her for part of her funds and can be invested into whatever you might have wanted to in a S&S isa but will have that extra cash thrown in on top.

After all, she could take benefits (ie her tax free LS) in just 2 years time if she wanted or needed to.

Thank you very much, I think I'm going to encourage her to use a penison with the right fund. Only worry I have is the tax treatment over an ISA. She gets 20% added to the pot, which is great, but then 75% of the pot is taxed at 20% whereas if we were to just go with several ISA's over the next few years none of it would be taxed atall.

She's a care assistant for a very small company

(Obviously first stop is to go and see an IFA though)

grey_gym_sock

the tax advantage of a pension compared to an ISA is not huge when you are only getting 20% relief up front, but there is some advantage. note that some of the taxable pension may not be taxed, because the state pension by itself is less than the personal allowance. so likely to be worth putting a bit in a pension.