Advice on savings/pensionetc

EdInvestor

jamesd wrote: »

Given the likely income levels, don't be surprised if holding some investments in investment bonds is suggested.

It will be the first thing they mention.

They are a useful tax approach when taxable income is likely to be over 20,000 a year

So the thing to do is to avoid having taxable (ie pension) income over this level.Make sure the rest of the income is not taxable.

There are a range of providers and charges, some good, some bad, the best ones offering the same sort of wide range of investments that you find in good fund supermarkets or pensions.

They have very high charges, and you pay more tax than you would if you used no wrapper at all but just invested direct, where you can use your capital gains tax allowance - it can provide 9k a year of tax free income for a start.

jamesd

They do not necessaily have very high charges and do offer advantages in some situations, including the possibility of age allowance reduction and potential higher rate tax, both of which are factors here. 9000 is less than half of the potentially available income even before any investment growth. Instead of or in addition to that 9000, investment bonds allow 5% of the bond value to be taken per year without tax and that's a useful capability. Add in the ISA investing and possible pension lump sums available and there's a lot of tax reduction potential.

dunstonh

They have very high charges, and you pay more tax than you would if you used no wrapper at all but just invested direct, where you can use your capital gains tax allowance - it can provide 9k a year of tax free income for a start.

Did one this week with a 10 year reduction in yield of 1.1% Cheaper than the unit trust alternative you suggest.

I dont know why you persist with these "high charges" comments because they are no different to any other retail product. Some can be cheap, some can be expensive. You dont measure all products by the most expensive versions available.