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    • Home • Advice • Common questions

    My pension has reached the lifetime allowance. Should I put my savings into an ISA instead?

    15 March 2021

    Question by Marc

    My pension has reached the lifetime allowance. Should I put my savings into an ISA instead?

    Answered by Boring Money

    Hi Marc

    Great question. Unfortunately, with the Lifetime allowance's complexity, it is not possible to give you a yes or no answer without understanding and knowing your circumstances. The key considerations would be:

    Are you employed and part of a workplace pension scheme. In which case, contributing to an Isa instead of a pension would mean losing your employer workplace pension contributions and the tax relief you receive to pay into a pension. Often even with the tax charge for exceeding the Lifetime allowance, you would be better off remaining in the pension scheme.

    Is there any other overlapping tax considerations to take into account, such as inheritance tax and your income tax rate.

    How long until you retire?

    What is the purpose of the money, and would the Isa help you meet that purpose if you cannot save it into a pension?

    Do you qualify for any Lifetime allowance protection.

    This is a complex planning area where good financial planning and technical expertise can support you in making the right decision. I hope this gives you some guidance and support.

    Keep well

    Helena

    Answered by

    Boring Money

    Here to help you understand your options and make smart money choices.

    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
    Risk warningAs is always the case with investing, your capital is at risk. The value of your portfolio can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may change in the future.
    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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