10:40 28 February 2013
Funding retirement is an increasing concern in the United Kingdom. Economic struggles and changes in workplace trends mean many retirees are faced without the necessary funds for their retirement years. Pensions have been a common way to offset the costs of retirement, but it is also possible to set up an ISA.
•Tax-Free. These two words, small though they may be, carry a great deal of significance. You already pay takes on your wages when you receive your pay in your pay packet, so it doesn’t seem fair to tax it again.
•Stability. ISAs are not subjected to the same amount of change and uncertainty as pensions are. Pensions could end up being financially more beneficial, but the outcome is dependent on a great deal of variables and many do not find the idea favourable.
•Everyone eventually considers retirement, but in the event of an emergency, having immediate access to the funds in your account could be more beneficial to you than being forced to wait until a certain age to access the funds.
•ISAs used for retirement are flexible, so you are able to have either the cash ISA which essentially provides you with a relatively stable rate of return, and you are guaranteed to receive at the very least, the amount you have put in.
You also have the option of choosing a stocks and shares ISA if you want to see if you can achieve a larger return on your investment. You can even have a combination of the two.
The increased amount of control over a person’s retirement and future is a desirable idea for many investors, especially those who find pensions to be unnecessarily complex or who will not benefit from reduced taxes.
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