Re: Should you swap your pension for an ISA?
Pension or Isa. Neither appear very attractive at the moment.
Would people not make more interest and safe guard their savings by investing in a tax haven/offshore bank account at the moment.
Isn't it possible to open a Swiss Bank account,earn interest and have access to one's money through a card facility.I would like to know more about this and are their any pitfalls in following this option.
I never see very much written about this or how to go about it.
Another option is to spend what you have while you still can and before it is taken off you by taxes or some other means! Live for today and let tommorrow take care of itself.
Thu, 05/02/2009 - 16:11
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I don't know how you can say that "neither appear very attractive at the moment" as a pension and ISA are merely a wrapper that's used to hold the underlying investments you choose to invest in.
What you want to invest in and the wrapper/method you choose to use are important, but probably come second to actually doing something about it - live for today sounds a bit like a head in the sand option.
The Investor Profile website has a pretty useful comparison of Pensions and ISAs, and compares it to property as well.
Sat, 28/03/2009 - 14:09
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From the article on [URL elided - it would appear something's triggering the filter on here - I'm assuming it's this]
I quote:
If you're not, Altman says people could consider moving their ISAs into
a pension. But if they are, then they can spend their ISA savings with
100% tax relief.
Altman seems to be missing the point that the ISA money doesn't have any extra tax relief since it's saved out of post-tax income (whereas the pension fund is built up from pre-tax income, but is taxed on receipt.)
Apart from the 25% tax-free-cash you can obtain from your pension fund (and for a minority, the difference between the higher rate of income tax when earning and normal rate of income tax when retired,) there is no tax difference between the ISA and the pension fund if they're invested in the same thing. For (simple) example, something earning 7% p.a. over 5 years for a basic rate tax payer (20%):
Pension fund: 100% wages x 1.07 x 1.07 x 1.07 x 1.07 x 1.07 x 0.80
ISA in same: 100% wages 0.80 x 1.07 x 1.07 x 1.07 x 1.07 x 1.07
They're the same.