getting a tax break and beating the downturn by investing now ?

mojito

I can get a good chunk of contributions from the governement if I invest a fixed amount in a pension before the end of the tax year. This could be as an ISA ? I understand.

But if shares are deflated then could this mean that in general shares that may be bought by a particular plan might be good value ??? in relative terms..then as thing stabilise which they will eventually even if it takes 18 months which lets face it with a pension its going to ride this out.

It goes by the principle that one should buy shares when they are relatively good value.And could this be construed like that ? Alongside the tax breaks I might be interested in this and so would like some of your thoughts.

I find myself like a lot of young cash rich property poor with nowhere to invest as property is out. At least here.

:money:

CLAPTON

Investments in pensions are tax free so yes if you invest in a pension the governement contributes the 22% that would othewise go in tax (assuming your are a standard rate tax payer).
However you need to be aware that you can't access any of that money until you are 55.


You can quite separately invest in an ISA... This tax year you can invest up to 7000 if an investment ISA or 3000 in a cash ISA. You pay into the ISA after taxation but any interest, dividend or capital gain is tax free.
One advanatage of ISAs is that you can withdraw the money when you want.

As you are young, I would suggest you think carefully about what accesss you want to your money. You will probably want to buy a property eventually so having ready access might well be more suitable than investing in a pension.

EdInvestor

mojito wrote: »

But if shares are deflated then could this mean that in general shares that may be bought by a particular plan might be good value ??? in relative terms..then as thing stabilise which they will eventually even if it takes 18 months ...

You are describing the "value" approach to buying shares, which has a long history of success and is based on the simple idea of buying low and selling high. But with all share investment it is necessary to take a 5 year view, 18 months is too short.

bigbloke45

I think you are looking for approval of what you intend to do.

Use your own judgement.