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Self Employed LISA v Pension
stevecottagers
Posts: 1 Newbie
Hi there,
Hope everyone is keeping safe during this virus outbreak.
I've recently become self-employed and am now looking at how best to save for retirement. I've done a fair bit of research but was just looking for clarification on a few things if people were able to help.
My current plan is to open a stocks LISA and use this, in the first instance, as my savings for retirement (I'm 36). If I then had any additional money (post the £4k allowance) I would invest that into a pension. Both 'pots' would be purely for retirement.
My thinking behind this method is that all money, including interest made, in the LISA would be tax free upon withdrawal. In a pension only the first 25% would be tax free upon withdrawal.
I am currently a lower rate tax payer.
Any input on this would be much appreciated.
Thanks!
Hope everyone is keeping safe during this virus outbreak.
I've recently become self-employed and am now looking at how best to save for retirement. I've done a fair bit of research but was just looking for clarification on a few things if people were able to help.
My current plan is to open a stocks LISA and use this, in the first instance, as my savings for retirement (I'm 36). If I then had any additional money (post the £4k allowance) I would invest that into a pension. Both 'pots' would be purely for retirement.
My thinking behind this method is that all money, including interest made, in the LISA would be tax free upon withdrawal. In a pension only the first 25% would be tax free upon withdrawal.
I am currently a lower rate tax payer.
Any input on this would be much appreciated.
Thanks!
0
Comments
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It's the first 25% plus anything else up to your personal allowance that would be tax free to withdraw from the pension. For the next slice of income above that, the LISA is a more attractive option (with the obvious caveats about LISAs counting towards your savings for means testing etc).0
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