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thanks
The principle is that you should only be taxed once.
yes, so i suppose thats what i mean when i ask if the 'return in my pocket in 5 yrs time' will be the same.
i sort of get it that the tax comes off at different times, but as a 20% tax payer, does that mean it really doesnt matter which i choose? and that if it doesnt matter from a tax POV, then it may make sense to choose the ISA (with the same investment funds) if im not charged any transaction fees each time i chuck some wedge in?
in short, im asking whats my best way of saving to get the best return in 5 years time if i make regular payments every month or two 😀
cheers
thanks
The principle is that you should only be taxed once.
yes, so i suppose thats what i mean when i ask if the 'return in my pocket in 5 yrs time' will be the same.
i sort of get it that the tax comes off at different times, but as a 20% tax payer, does that mean it really doesnt matter which i choose? and that if it doesnt matter from a tax POV, then it may make sense to choose the ISA (with the same investment funds) if im not charged any transaction fees each time i chuck some wedge in?
in short, im asking that at 55, whats my best way of saving to get the best return in 5 years time if i make regular payments every month or two 😀
cheers
My company closed its pension scheme and appointed WPS (Work Place Solutions) as the IFA so I don't know how much they paid. WPS helped me get my pension invested by Brewin Dolphin in Glasgow who are reassuringly Scottish and seem to be doing a good job despite the poor returns for somebody with a moderate risk profile. WPS have been OK but in the end they are just part of the financial services "industry", which generally employs kids.
ISAs c/w SIPPs - Other considerations:
On death, your spouse can inherit your ISA and retain the tax free benefits.
On death, any beneficiary can inherit your SIPP without inheritance tax if you die before age 75.
If you die within 2 years of transferring a defined benefit pension to a SIPP it can be subject to inheritance tax.
Correct me if I am wrong Footflaps but doesnt that limit the tax relief that you have on any future contributions? Once you start taking your pension (even if you are still working and contributing) then the benefits are reduced?
Yes, although I don't know exactly how it all works as I'm only 48 so have only studied the 'putting money in' part of it all (as it may well all change before I hit 55).
I'm guessing with some care you could possibly continue to make contributions to a married partner's pension as long as it came from your salary and not the 25% tax free (pretty sure you'd get fried for doing that). Before doing that I'd want some proper tax advice though....
On death, any beneficiary can inherit your SIPP without inheritance tax if you die before age 75.
I've never understood why 75 given your partner could easily have another 25 years left and may be entirely reliant on your pension.
in short, im asking that at 55, whats my best way of saving to get the best return in 5 years time if i make regular payments every month or two
I would go SIPP as you get 20% tax back and can take 25% of it all tax free when you decide to start taking your pension. In your case, as you are already 55, if you suddenly have to take money out, it's not a problem.
On death, any beneficiary can inherit your SIPP without inheritance tax if you die before age 75.
I’ve never understood why 75 given your partner could easily have another 25 years left and may be entirely reliant on your pension.
Seems arbitrary, but after 75 they still inherit, but have to pay income tax on it.
[A SIPP can be passed down the generations, i.e. your SIPP can be passed on to your spouse, and when they die, it can be passed on to whoever their beneficiaries are].
All these can change with any future government policies. IANAFA.
I would go SIPP as you get 20% tax back and can take 25% of it all tax free when you decide to start taking your pension. In your case, as you are already 55, if you suddenly have to take money out, it’s not a problem.
and theres no transaction fee implications? if i were to pay in a deposit to a SIPP every month, would that cost me £120ish? against nothing for an ISA?
and theres no transaction fee implications? if i were to pay in a deposit to a SIPP every month, would that cost me £120ish? against nothing for an ISA?
There would be a fee for buying shares / funds each time which would be platform dependant, normally around £10. But you could just pay in £120/month and only buy shares once every 6 months. The fee is normally the same for an ISA/SIPP for a given platform.
Eg HL share dealing fees are https://www.hl.co.uk/shares/share-dealing/dealing-charges
EDIT having seen that page, if you're buying funds (which I think is what you have), they don't charge a 'dealing' fee.
EDIT having seen that page, if you’re buying funds (which I think is what you have), they don’t charge a ‘dealing’ fee.
not sure what a dealing fee is. i wouldnt be 'buying shares/funds' each time would i? just topping up what ive already bought, or doesnt it work like that?
im simply wondering whether id have to pay a fee (tenner?) every time i deposited money and stuck it onto my 'lowest value' fund to even up the balance. and for arguments sake, i may to this each month. no fee with either SIPP or ISA?
and yes youre right, i went for the 5 recommended funds (spread globally) at 20% each.
When you pay in money to HL etc it just sits in an account earning no interest, which might be fine, but normally you then pick a fund / share and ask HL to buy as many shares as they can with your £. That involves a bit of work for them which they then charge you for 'trading fee' with shares. With funds they don't seem to charge a trading fee, but they take 0.45% of your total funds invested with them as a fee each year.
So, no one off fee to top up your funds each month, but you pay an annual overall fee of 0.45% to them for using the platform.
With funds they don’t seem to charge a trading fee, but they take 0.45% of your total funds invested with them as a fee each year.
so..... please excuse me for still being a thickie, but am i right in thinking that itll cost me nothing at all to keep pumping deposits into HL, nothing to then put that money into the lowest value fund, and then log out. the only cost will be 0.45% per year, which they would still have taken anyway, but as theres a bit more wedge in there now itd obviously be a bigger annual fee?