Pensions 'not better than ISAs' by Finance News Bulletin
Published: 12/12/07
Millions of Britons could be better or evenly well off investing in an Individual investments Account (ISA) rather than a pension, a account has saidThe account from website Everyinvestorcouk goes against many experts' view that pensions are best because aid enjoy duty relief
However, the report said that the fact that pension income was taxed in retirement negated the tax releaseBut critics branded the report "superficial" and optional that the case for ISAs over pensions was being played-upEveryinvestor compared the qualities of saving in an ISA with a personal retirement fund, where there were no contributions from an employerIt used the example of two basic rate tax payers each causal the after-tax relief equal of £200 per month, one into an ISA and the other into a personal pension
They (Everyinvestor) have assumed the most excellent case for the ISA and worst for the retirement fund and this undermines the researchHowever, when the retirement fund fund was second-hand to buy an annuity - a retirement income for existence - it was roughly equivalent to what the ISA saver could make through keeping their money invested in an account paying 45% interestFor example, once a pension finance is second-hand to buy an annuity it becomes, in effect, the possessions of the annuity provider and not the saver"Given these figures it is no surprise that usual pension saving continues to refuse," said Chris Gilchrist, Everyinvestor spokesman
But Tom McPhail, head of pensions investigate at Hargreaves Lansdown, described the Everyinvestor report as "superficial""They have assumed the most excellent case for the ISA and most horrible for the pension and this undermines the research," Mr McPhail said"ISAs give more short word flexibility but pensions give you a tax advantage even for essential rate
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