Am I well balanced?

System

Oooo good point bowlhead, didn't know that, that changes my plan after my son outgrows tax credits, till then anyone on tax credits ought to go pension I think (apart from that liquidity point - which is a double edged sword if it affects JSA entitlement)

SavvySparkle

Yes I agree bowlhead. I definately think LISA's should be offered to older people than 40, the benefits of 25% 'every year' being added could mean quite a lot to someone retiring in say the next 10 or so years, which could mean an extra 10k plus being added, which to many is quite a sum!! (I know this is not relevant to the original post due to being lower than 40 years of age and so is legible for one if he wishes, but just stressing my point for fairness! How come in employment we are not allowed to be ageist but the Government are?! Anyone who is under current Government retirement/pension age needs to be helped to save and the nearer you are to retirement the more careful you need to be when investing in stocks and shares).

jimjames

SavvySparkle wrote: »

Yes I agree bowlhead. I definately think LISA's should be offered to older people than 40, the benefits of 25% 'every year' being added could mean quite a lot to someone retiring in say the next 10 or so years, which could mean an extra 10k plus being added, which to many is quite a sum!! (I know this is not relevant to the original post due to being lower than 40 years of age and so is legible for one if he wishes, but just stressing my point for fairness! How come in employment we are not allowed to be ageist but the Government are?! Anyone who is under current Government retirement/pension age needs to be helped to save and the nearer you are to retirement the more careful you need to be when investing in stocks and shares).

You still get full tax relief for paying into a pension, either 20% or 40% so it's not very different to a LISA, pension is better if you're on 40% tax. S&S are relevant for any pension, just because you retire age 65 or so doesn't mean you have any less need to beat inflation,. If anything you need to do so more because your income becomes more limited.

SavvySparkle

I agree JimJames, but for someone on less than 40% tax code and nearer to retirement, over 40 and beyond, then the risk of S&S can be greater, especially perhaps for lower earners, and although less potential gain a LISA type investment is guaranteed/risk free cash at least. They should be offered to older people under retirement age too, so the choice is there whatever your age.

System

Remember though that there is agism against the young, with rising state pension age, its a smame if someone is it by both.

Conditions for the young today arent the same as it was for the older, low interest rates have fuelled a house price boom that has meant a higher price relative to earnings for the young. The young can't just whack money into good cash accounts to save for a house while dodging the higher mortgage interest of the 80s-90s, they have to invest in either property or shares as soon as they can to ride that property inflation. You could say as well the young can no longer tax desuct their mortgage interest, but they can claim tax credits.

Overall its hard to say who is really worse off and its all about playing it right for the interest rate and tax environment