Did you know the age at which you can access your pensions is going up to 57 in 2028? That means for people lucky enough to be able to retire at 55, they’ll need additional provisions to bridge that gap. Even if retiring early isn’t your intention, planning for that eventual day you walk out of work for the final time is crucial towards providing the retirement you always envisaged. 

Individual Savings Accounts

Individual Savings Account (ISA) shelters your money from any further liability to Income Tax or Capital Gains Tax. ISAs are flexible and simple to understand as well, which is why they have proved such a popular way to save and invest. There are a number of different types of ISA to utilise -

Cash ISAs – a cash only savings account with a bank or building society 

Stocks and Shares ISAs – a tax-efficient way of investing your money into a wide range of company shares, government or corporate bonds, property or other assets.

Innovative Finance ISAs – a higher risk options which involves peer-to-peer lending 

Lifetime ISAs – a form of ISA introduced in 2017 to help individuals get on to the property ladder or save for retirement. The Government applies a bonus of 25% on up to £4000 of money saved.

ISA allowances work on a ‘use it or lose it’ premise. You are entitled to place up to £20,000 into an ISA. This is per person, so as a couple you can place £40,000 into two personal ISAs per tax year. However, if you part-fill, or do not use your allowance for the tax year, when the current tax year ends, you lose that allowance. You cannot carry forward previous years, so it’s crucial to make the most of your allowances in early life so that as the years march on, you have as much cash as possible in this flexible, tax-efficient wrapper. 

The value of an ISA with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise.  You may get back less than the amount invested.  A Stocks and Shares ISA will not provide the security of capital associated with a Cash ISA.

The favourable tax treatment given to ISAs may not be maintained in the future as they are subject to changes in legislation.

Please note that St. James's Place do not offer Cash, Innovative Finance or Lifetime ISAs.

Pensions 

People often don’t save much into this pension when they are younger. This is due to more pressing expenses such as buying a new home, having children and enjoying themselves! However, did you know you can utilise up to 3 previous tax years pension allowance (the lower of £40,000 p.a. or 100% of your relevant UK earnings (if not adjusted). This means you could put a whopping £160,000 (gross) in your pension in one tax year (dependant on your income in the tax year the contribution is made and that you were a member of a registered pension scheme at the time). In addition to this, you can claim tax relief up to your highest rate of tax on the contribution. The government automatically tops up your contribution by 20%. You are then able to claim higher rate or additional rate tax back, so an additional 20% or 25% dependant on your tax bracket and eligibility. 

Fully utilising this rule can be complicated and taking advice on the subject can make the process much simpler.

My role as your Financial Planner is to help you live the best life financially possible in retirement.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise.  You may get back less than the amount invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Any tax relief over the basic rate is claimed via your annual tax return.