When I turn 60, I can start to take my company pension. I’m hoping to use some Cash Isa money to boost my income until I reach state pension age at 67. Will I pay tax on the Isa part of my income?
You’ll be pleased to know that Isas allow you to withdraw your savings without paying any income or capital gains tax. The amount you’re allowed to put in Isas is capped each tax year, though – in the 2018/19 tax year the overall Isa allowance is £20,000.
If you plan to rely on Cash Isas, make sure you shop around for a good interest rate. Interest rates are so low at present that your savings are not likely to produce much income. See Moneywise’s weekly updated best Cash Isas guide.
I would suggest that you contact an independent financial adviser (IFA) to carry out a review of your circumstances, particularly in relation to your income, savings and tax position. A financial adviser could help you to maximise a tax-efficient income from your savings during retirement.
LISA VAUGHAN Chartered financial planner at Fogwill & Jones
The best Cash Isas
|Type of Isa||Account||Interest Rate||Notes|
|Easy access||Paragon Limited Edition Easy Access Isa (Issue 4)||1.31%||Transfers in allowed|
|Easy access||Shawbrook Bank Easy Access Cash Isa - Issue 4||1.3%||Unlimited withdrawals. Transfers in allowed. £1,000 minimum opening balance|
|One-year fixed-rate bond||Bank of Cyprus Fixed Rate Cash Isa||1.51%||Transfers in allowed. £500 minimum opening balance|
|Three-year fixed-rate bond||Aldermore Three Year Fixed Rate Cash Isa||1.8%||Transfers in allowed. £1,000 minimum opening balance|
|Five-year fixed-rate bond||Hodge Bank Five Year Fixed Rate Cash Isa||2.25%||Transfers in allowed. £1,000 minimum opening balance|
Source: Savings Champion, 13 April 2018