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“There’s a lot of distrust about constantly
changing pension rules. I’m never surprised
when I hear investors want to prioritise ISAs”
Pensions are often regarded as cumbersome
and boring products, but they still have the
edge over ISAs for retirement saving,
writes Daniel Lanyon
W
HEN IT COMES TO
MONEY, have you
noticed very few
investors seem to view
their pension as
anything other than dull while in
contrast they seem positively
chipper about their Individual
Savings Account (ISA)?
What with Carillion’s collapse,
and many other scandals involving
pensions, retirement planning has
been getting a bad name of late.
This has come alongside a host of
changes to regulation designed
to shake up the market and
encourage more investors to open
pensions while making them less
attractive to higher-rate taxpayers.
ONE OR THE OTHER
ISAs, meanwhile, are becoming
increasingly popular for retirement
purposes. For many investors the
question is whether they should use
these instead of their pensions.
Martin Bamford, managing
director of Informed Choice, says
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that while pensions are facing
pressures, enjoying a financially
secure retirement means having a
mix of income sources.
“There’s
a lot of
distrust about
constantly
changing pension
rules. I’m never
surprised when I
hear investors want
to prioritise ISAs over
pensions,” he says.
Of course, a minority are in the
fortunate position to use up both
their ISA and pension allowances
each year. For most people,
however, cash-flow represents the
biggest concern when they start
saving and investing “in case life
throws you a curveball,” as Adrian
Lowcock, investment director at
Architas, puts it.
Lowcock is one such
example: he raised a cash
buffer first, followed by
an ISA and ultimately a
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