ISAs and retirement
Pensions are a good way to save for your retirement because you can benefit from tax relief at source when adding to a pension – though there are limits on how much you can contribute to your pension in a tax year. ISAs can also have a role to play in retirement planning. You can only save or invest with an ISA from income on which you have already paid tax at source – i.e. from you salary that may have already been subject to income tax.
However, building up a portfolio of ISAs over time might be a good way to complement your pension. This is because you may be subject to tax when you begin to drawdown from your pension. By contrast, you can withdraw money from a Cash ISA or the proceeds of sale of investments from a Stocks and Shares ISA free of income tax or capital gains tax, potentially leaving your pension to grow intact for longer.
Combining your ISAs
Making the most of your annual ISA allowance by saving with a Cash ISA or investing through a Stock and Shares ISA each tax year may mean you build up fair few ISAs over time.
Our ISA experts say it may be worth considering bringing them together them under one roof. There are many reasons for bringing everything together. At Coutts, your statements are simplified and all with one provider. Also – the average journey for setting up a Coutts ISA is six minutes, so it can be done quickly and easily.
Coutts offers a Cash ISA and a Stocks and Shares ISA, both of which could help with your financial requirements.
You may also wish to speak to Coutts24 or your Private Banker to find out more.
Please note, our deadline for opening or topping up an ISA via Coutts Invest before the end of the tax year is 8pm on April 5.
For all other ISAs, the deadline is 12pm on 31 March. For Bed and ISA trading via our face-to-face service, currently the last date to instruct Bed and ISA is 3rd April, with funds then moved into ISA on latest 5th April.
The tax treatment of the investment is that applying under current legislation and can change. The availability and value of any tax reliefs will depend on your individual circumstances.
The value of investments, and the income from them, can fall as well as rise and you may not get back what you put in. You should continue to hold cash for your short-term needs.
Eligibility criteria, fees and charges may apply.