About Us Consumers Advisers Employers Media

You are not logged in.

• Log in
• Register

Adviser  >  News  >  October 2008  >  Personal Pensions or ISAs?

Personal Pensions or ISAs?

The post A-Day rules provide an excellent opportunity for people with substantial ISA or other short-term investments to make large single payments into a pension.

With tax relief available on payments up to 100% of earnings (or £3,600 if greater) and full concurrency, many people will be able to significantly boost their pension savings by moving money from an ISA or savings account into a pension.

When you consider that over £25 billion was invested in Cash ISAs in 2007/08¹, potentially there is scope for some money to be redirected to pension plans. This will depend on personal circumstances and may not be in everybody's best interests.

If your clients need instant access to their savings, ISAs still have an important part to play. But for those close to retirement or with less need for ready access to their funds, personal pensions and self invested personal pensions (SIPPs) are also attractive options.

This can generate potential business opportunities for you, allowing you to demonstrate the value of your advice by helping to increase your clients’ long-term savings.

Personal Pensions Vs ISAs – a comparison

This comparison shows that personal pensions and SIPPs have more tax incentives, exposure to more asset types and can accept larger payments than an ISA.

This should be balanced against lack of access until age 50, which means that they are longer term investments for most people.

References to taxation are based on our understanding of the current taxation law and practice and may be affected by future changes in legislation.

How we can help – Pension Portfolio

Pension Portfolio from Scottish Life has been designed so that it can adapt to fit around the needs of almost any client. It offers value for money for those clients looking for a simple and easy to understand pension and substantial investment flexibility for seasoned investors looking for more involvement in choosing investments.

Our Pension Portfolio provides:

• A complete investment solution made up of a combination of core investments and self investments
• Core investments that include our unique Managed Strategies, a range of nine time- and risk-graded portfolios that maintain suitable asset allocations for your clients over time
• An array of self investments with a fund supermarket, share dealing on an execution-only or advisory basis and all the other permitted investments you’d expect, including UK commercial property
• Integrated income drawdown facility – Income Release - allowing benefits to be withdrawn directly from your clients' plans at a time and in a way to suit their individual needs
• A highly competitive charging structure, which means that your clients only pay for what they use
• Financial Adviser’s Fee (FAF), our pioneering way to make sure that you’re remunerated precisely as you wish to be remunerated for your advice and service.

Find out more

If you'd like more information about Pension Portfolio, please contact your usual Scottish Life representative or visit:
www.scottishlife.co.uk/pensionportfolio.

Notes

1. HM Revenue & Customs
2. Where a person invests in both a Cash ISA and Stocks & Shares ISA the maximum total payment is £7,200 p.a. (so if £1,000 is invested in a Cash ISA only £6,200 can be invested in a Stocks & Shares ISA)
3. SIPPs allow direct investment in the underlying assets as well as through collective investments, such as unit trusts and OEICs.