With inflation soaring, many Britons will want to make sure they don’t lag behind as the purchasing power of cash deposits diminish. Consequently, for long-term planning many will turn to investments. But which option will suit people best?
Tim Clay, Wealth Planner at Succession Wealth, shared insight on pensions versus Individual Savings Accounts (ISAs), alongside their benefits and drawbacks.
He firstly stressed it is vital for Britons to ensure their money is working as hard as possible when planning for retirement.
Mr Clay explained: “Whilst both pensions and Individual Savings Accounts (ISAs) may be appropriate vehicles for retirement savings, they do work in different ways and each has its own unique set of rules.
“However, both are considered tax-efficient ways to save for retirement and making regular monthly contributions, whether into a pension or an ISA, will help to ride out stock market volatility.”
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Alternatively, there are a variety of ISA options available, each with their own individual rules, but they are still a popular method of saving.
One of the key benefits of an ISA as opposed to a pension is that money can be withdrawn at any time.
In addition, there is no income or capital gains tax paid when a person chooses an investment, or Stocks and Shares, ISA.
ISA investments should be undertaken for the medium to long term, and Britons should be aware there are some risks -…
