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Could your retirement plans be more tax efficient?

According to the Bank of England, between March and November 2020 we’ve collectively saved £125 billion more than we normally would. Perhaps a positive to come out of a challenging time.

If this is true, have you thought about how you could use your extra savings to support your financial plans? One way to do this is to look at how you could save or invest tax-efficiently.

Making use of your annual tax allowances could really help – especially when it comes to retirement planning.

There are some good tax benefits available to you

A great place to save or invest tax-efficiently is to look at an Individual Savings Account (ISA). ISAs can provide you with tax benefits and form a strong part of your long-term financial planning.

With a yearly allowance of £20,000 available, you don’t have to pay any income or capital gains tax on the growth you achieve. Over time, these tax benefits could make a difference to your financial future.

At a time of low interest rates, every penny counts, and putting your money inside an ISA wrapper means you keep more of the returns you make.

Choosing an ISA that’s right for your future needs

It’s likely you have short-term aspirations. A well-deserved holiday or buying a new car. A suitable option which could help you achieve these kinds of goals could be a Cash ISA.

You’ll probably also have objectives that are more than five years away. Depending what stage you’re at, this could be your retirement. Or it might be putting money aside for loved ones. It could even be as simple as getting more from the wealth you’ve already built. For goals like these, a Stocks & Shares ISA could be an option. It provides you with the potential for your money to grow as it’s invested.

If you’ve got extra funds available that could be working harder for you, inflation could very well eat away at it, year on year. Investing could be a good way to combat the effects that inflation might have on your money and offers the potential for greater returns than you might get with a Cash ISA. But you should be aware that, with a Stocks & Shares ISA the value of your investment could go down as well as up and you may get back less than you invest.

Pension benefits to be had

With everything that’s gone on of late, you might be more interested in retiring earlier than planned or just understanding when you can.

One thing to bear in mind is that the age you receive you state pension is becoming later. It’s already risen to 66. So building up other investments could help you stop or phase back working sooner.

Did you know that you can typically pay in up to £40,000 a year into pensions and benefit from tax relief? Making the most of the tax efficient benefits that come with a pension could strengthen your plans. Even if you have a workplace pension, you could further boost your retirement fund by taking out a personal pension.

If you invest in a pension, your eventual income in retirement will depend upon the size of the fund at retirement, future interest rates and tax legislation.

How financial advice could help you make stronger plans for your money

There are many options available out there for your money, and it can sometimes seem feel like a minefield. Likewise, you may have a good idea of what steps to take, but you’re struggling to find the time to act on them.

That’s why Skipton Building Society are here to help you consider your financial options. A meeting with one of their expert financial advisers could make a difference in the choices you make when it comes to making your money more tax efficient.

Recommendations are likely to include stock market-linked investments. These aren’t like bank and building society savings accounts as your capital is at risk and you might get back less than you originally invested. The tax treatment of your investment depends on your individual circumstances and legislation, both may change in the future.

Get in touch

You don’t even need to leave the house to plan your future with an expert. You can have a no-obligation consultation over the phone – or via their award-winning and easy-to-use video appointment service, Skipton Link.

Call Skipton today on 0345 607 9809 to see if you could benefit from financial advice or find out more here

Silversurfers is an Introducer Appointed Representative of Skipton Building Society, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority, under registration number 153706 to provide Restricted financial advice. The Financial Conduct Authority does not regulate most forms of inheritance tax planning. Should you take advice from Skipton Building Society, Silversurfers will receive a fee for the introduction. To help maintain service and quality, some calls may be recorded and monitored. Calls are free from both landlines and mobiles.
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