property, pension, isa

Linton

https://forums.moneysavingexpert.com/discussion/comment/82032263#Comment_82032263

Three good reasons to use S&S ISAs:

• Easy access at any time.
• greatly simplifies taxes, no need to worry about income tax and CGT
• Extremely valuable if you are likely to be a higher rate tax payer in retirement

I would agree that cash ISAs are of very limited value. If you have sufficient spare cash to make them worthwhile, you should consider investing the money instead.

El_Torro

The main benefit of a Stocks & Shares ISA as I see it is if you won't need the money for 10 years or more, and you won't be old enough to access your pension in 10 years time.

There is also a benefit of having a decent sized S&S ISA when retired. When there is a big outlay (house repairs, buying a fancy car, etc…) it could be useful to spend the money from your ISA to avoid paying higher rate tax from your pension. As the years go by and fiscal drag does its job it is becoming easier and easier to fall into higher rate tax when retired.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82032263#Comment_82032263

If it were me I would be trying to put the £120k of savings into an ISA (a cash ISA). As things stand you are paying income tax on (some of) the interest. The starter rate might help you but only if you earned a lot less. Admittedly it will take years to get that much into an ISA (of any type but especially the cash ISA when the limit goes down to £12k).

You mention "claiming". If you mean means tested benefits then your savings are way too high for that aren't they? If you want to put the £120k into a pension then you have to balance the tax relief and "benefits" advantage with the inaccessibility of the money.

If you are saving it for a house then it will be just as accessible in an ISA as it is in the savings account.

olb81

DRS1 what about if the 120k was used very soon for a house

Yorkie1

If you want the money soon for a house, definitely don't invest it in stocks and shares.

What time frame is "very soon"?

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82032974#Comment_82032974

OK Not much point putting it in an ISA in that case. Presumably the S&S ISA will also go on the house? May be wise to keep something back - there will always be stuff to buy or walls to paint when you move in.

olb81

Yes would be a case of ditching the ISA other than maybe 5-10k as an emergency fund

In order to have a smaller mortgage.

From then pay the mortgage, keep paying into pension and keep EF topped up or drip feed a new ISA

olb81

It appears I have a flexible isa. Is this good?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82038585#Comment_82038585

Flexible ISAs allow you to withdraw money and replace it in the same tax year without it counting towards your annual ISA contribution allowance, but whether that's good for you depends on what you have in mind!