Pensions provide a tax-efficient way of saving and investing
for retirement and they could greatly improve your future
life. By how much depends on what you are willing to pay in,
the fees you are charged, and on how well the investments
perform. We can help at every stage.
Eriswell offers both managed personal pensions and Self-
Invested Personal Pensions (SIPPs). Unlike SIPPs, managed
personal pensions can benefit from full protection under
the UK financial compensation scheme. SIPPs do however
possess certain flexibilities and hence we offer both
options.
We will, where appropriate, reclaim a 25% credit from UK
Revenue & Customs, meaning that every £100 you invest
will automatically be turned into £125. Additional tax credits
may be available for higher rate taxpayers.
Unlike an ISA or Personal Pension, there are no tax benefits
from investing in a GIA. You will pay income tax and capital
gains tax in accordance with your personal tax situation.
For this reason, GIAs typically come into play if you wish to
invest more than the annual £20,000 limit into an ISA
account. They are flexible structures with no upper limit on
how much you can invest, and you can add to or withdraw
from your GIA whenever you wish.
GIAs enable clients to hold a very broad range of
investments right across the world, including some which
may not be held within other wrappers, usually for tax
reasons.
You may choose to select your investments yourself
including one or more of our 6 MPS (Managed Portfolio
Service) strategies, each of which operates within a clearly
defined framework to ensure it remains consistent with
your investment expectations. Alternatively, you may ask us
to manage your portfolio for you.
General
Investment Account
A Lifetime ISA (LISA) can be used by people aged between
18 and 39 to put money aside and invest towards either a
deposit for a first home or retirement.
The maximum contribution is £4,000 per tax year and the
UK Government will give you a 25% bonus up to a
maximum of £1,000 per year.
You can use your LISA to buy your first home worth up to a
maximum value of £450,000. Or you can invest into it until
you turn 50 and finally access it aged 60 or above.
Withdrawals outside of these two cases will incur tax
penalties.
Lifetime ISA
Cash and Stocks and Shares ISAs (Individual Savings
Account) can broadly be thought of as tax-free savings
and investment accounts. You can open a maximum of
one of each per tax year. Maximum contributions are
limited to £20,000 each per tax year and this can be split
across all available ISA types.
Unlike a pension, ISA investments are made with post-tax
income, after which any capital gains, dividends, interest,
or other returns are generally tax free.
Stocks and shares ISAs allow you to invest into a range of
products including stocks, shares, investment funds,
government bonds, and corporate bonds. Unlike “Cash
ISAs”, “Stocks and Shares ISAs” can carry significant
investment risk.
Stocks and shares Junior ISAs and cash Junior ISAs (JISAs)
work in largely the same way as adult ISAs and provide a
tax efficient way to invest for your child/children’s future.
A parent or guardian must open the account, but anyone
can contribute into it subject to the maximum annual
contribution limit of £9,000 per child.
The named child can manage their own account from age
16 and can access the funds when they turn 18.
Unlike adult ISAs, where it is possible to have multiple
ISAs, you are only allowed to have one cash Junior ISA
and one stock and shares Junior ISA per child.
Junior ISA
Finding the ‘tax wrappers’ that are right for you
There is a common misconception about the difference between a ‘tax
wrapper’ and its underlying investments.
A tax wrapper is a financial structure which individuals can wrap around
their investments to shield them from some or all of the tax on them. The
two most common tax wrappers in the UK are pensions and ISAs, and both
offer significant tax benefits to almost everyone. The more you deposit into
them – up to maximum allowances – the larger the rewards you will see.
But remember, regardless of which wrappers you choose the performance
of each investment within them remains exactly the same.
Finally, the preferential tax treatment afforded by tax wrappers depends on
your personal circumstances, applicable laws, and tax rules all of which are
subject to change.
‘Cash’ and ‘Stocks
& Shares’ ISAs
Personal Pensions
&
SIPPs
Investment Risks:
As always, before you decide to buy you need to understand the different options available to you, and the risks and
commitments involved. You should take financial advice to understand which option would best suit your needs.
Share prices may go down as well as up and you may not get back the original amount invested. Any information relating
to past performance of an investment or investment service is not a guide to future performance.
