ISA or Pension Pot

nottsphil

Albermarle said:

kimwp said:

Eyeful said:

I do not know about your personal circumstances. General guidance is:

1. Use tax shelters where you can.

2. Pensions for long term investing.
 As a basic tax payer if you put £80 and get tax relief of 20%, you get £100 to invest. That a £20 gain straight away, something you do not get with an ISA.

3. Pension money is not taxed on the way in but on the way out.
   ISA money has already been taxed, so is not taxed on the way out.

4. Any money you will need within 5 years should be in a Cash ISA savings account protected up to £85k by the FSCS.

5. If you are considering investing, look into  a Low cost Multi Asset Fund, with a share/bond split or share risk split you are comfortable with.
https://monevator.com/passive-fund-of-funds-the-rivals/

At 66, presumably a pension doesn't need to be for long term investing?

The average life expectancy of a 66 year old is around 20 years . That means 50% will live longer than that.

If that statistic is correct then I'm guessing the average would be something like 18 years for men and 22 for women. 

Albermarle

nottsphil said:

Albermarle said:

kimwp said:

Eyeful said:

I do not know about your personal circumstances. General guidance is:

1. Use tax shelters where you can.

2. Pensions for long term investing.
 As a basic tax payer if you put £80 and get tax relief of 20%, you get £100 to invest. That a £20 gain straight away, something you do not get with an ISA.

3. Pension money is not taxed on the way in but on the way out.
   ISA money has already been taxed, so is not taxed on the way out.

4. Any money you will need within 5 years should be in a Cash ISA savings account protected up to £85k by the FSCS.

5. If you are considering investing, look into  a Low cost Multi Asset Fund, with a share/bond split or share risk split you are comfortable with.
https://monevator.com/passive-fund-of-funds-the-rivals/

At 66, presumably a pension doesn't need to be for long term investing?

The average life expectancy of a 66 year old is around 20 years . That means 50% will live longer than that.

If that statistic is correct then I'm guessing the average would be something like 18 years for men and 22 for women. 

Yes it something like that, although I do not think the gender gap is quite as high as 4 years.

eskbanker

Albermarle said:

nottsphil said:

Albermarle said:

kimwp said:

Eyeful said:

I do not know about your personal circumstances. General guidance is:

1. Use tax shelters where you can.

2. Pensions for long term investing.
 As a basic tax payer if you put £80 and get tax relief of 20%, you get £100 to invest. That a £20 gain straight away, something you do not get with an ISA.

3. Pension money is not taxed on the way in but on the way out.
   ISA money has already been taxed, so is not taxed on the way out.

4. Any money you will need within 5 years should be in a Cash ISA savings account protected up to £85k by the FSCS.

5. If you are considering investing, look into  a Low cost Multi Asset Fund, with a share/bond split or share risk split you are comfortable with.
https://monevator.com/passive-fund-of-funds-the-rivals/

At 66, presumably a pension doesn't need to be for long term investing?

The average life expectancy of a 66 year old is around 20 years . That means 50% will live longer than that.

If that statistic is correct then I'm guessing the average would be something like 18 years for men and 22 for women. 

Yes it something like that, although I do not think the gender gap is quite as high as 4 years.

3 years, according to the ONS calculator - a 66 year old male has an average life expectancy of 85, a female 88, although obviously such figures are rounded, so could potentially be 84.5 and 88.49!

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

Jubee

How much can you pay into a SIPP each year?

InvesterJones

Jubee said:

How much can you pay into a SIPP each year?

If you're not an extremely high earner, and you've not started taking a pension income, then your salary, or up to £60,000, whichever is lower. If you have triggered money purchase annual allowance by taking income (aside from tax free lump sum) then your salary, up to £10,000.

Catbonkers

I am claiming my state pension, plus I work part time, I could put £3,000 per annum into a SIPP

Albermarle

Catbonkers said:

I am claiming my state pension, plus I work part time, I could put £3,000 per annum into a SIPP

State pension does not count.
You can pay in gross everything you earn in your part time job. So if you earn £5,000 per tax year, you can add £4000 and the provider will add £1000 basic rate tax relief.

If you earn less than £3,600 ( or nothing at all)  then you can still add £3600 . You add £2880 and £720 tax relief is added.

Do not know where the £3K figure comes from, unless you paying also into a workplace pension maybe ?

Catbonkers

Thanks so much