Wrap up your investing

To encourage more of us to save and invest, the government gives tax breaks that you can ‘wrap’ around your investments. These are known as tax wrappers. There are two main types of tax wrappers: ISAs (Individual Savings Accounts) and pensions.   Here’s an overview of what you can expect with both.

ISAs (for your savings and investments)

Which ISA is which?

 

When should I use each?

Pensions (saving for your retirement)

You can use pensions alongside your ISAs to save for your future.

There are two main types of pensions

1. Workplace pension

Workplace pensions are extremely attractive as the employer contributes free money into your retirement savings. If you have access to a workplace pension you should enrol now to get access to this employer top up.

2. Personal pension

If you’re self-employed, or you want to consolidate your old pension pots, a personal pension can be an effective way to keep all of your retirement investments in one place. Do make sure you understand the advantages and disadvantages of consolidating existing pensions before you transfer these.

 

Quiz: What is the best tax wrapper to invest for your retirement?

  1. Workplace pension
  2. Cash ISA
  3. Junior ISA

What next?

 

Quiz answer: 1

 

 

 

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is not a reliable guide of future performance.