How should I save for retirement?

It’s wise to have savings plans to top up your retirement provision

Do you know when you’ll retire? More importantly, do you know when you can afford to retire? A recent survey conducted by Foresters Friendly Society in association with Mature Times* revealed that two-thirds of respondents aren’t confident that they’ll have enough money to live on when they finish working. And, when you look at the numbers, it’s not difficult to see why.

The State Pension, currently just £6,029 per year, simply isn’t enough to support a comfortable retirement. Even with the addition of a workplace pension or other private pension schemes, the reality for most people is this: If you want to enjoy the retirement you’ve always imagined, you’ll need to have additional long-term savings plans in place.

For example, if you want a long-term savings plan that provides the opportunity for your money to grow, where interest is tax free, but you can still access your cash if you need to, then why not consider a Stocks and Shares ISA?

By taking out a Stocks and Shares ISA as a way to supplement your pension, you can:

  • Pay in monthly, or with a lump sum – currently up to £15,240 in the 2015/2016 tax year. Each April, you’ve a fresh allowance to use, giving you the opportunity to keep topping your ISA up.
  • Once your money is in there, it stays tax-free, year after year. Someone who’d filled their ISA allowance every year since they started in 1999 could now have getting on for £100,000, including interest protected from the taxman**.
  • You can withdraw money from your ISA free of tax, although different providers have different rules and conditions regarding withdrawals and access to your money.
  • Stocks and Shares ISAs are intended to be longer-term investments, which can potentially yield better returns than a Cash ISA.

But remember…

  • Depending on how long you’ve had the Stocks and Shares ISA and when you withdraw money, as with any investment linked to the stock market, there is the potential that you could get back less than you put in.
  • The opportunity for potential growth is dependent on the performance of the Stock Market, and any other asset types your money is invested in.

It’s a lot to think about. But, if you’re considering a Stocks and Shares ISA as a valuable addition to your retirement planning, why not take a closer look?

Please note:

Tax rules may change and depend on individual circumstances.

Inflation could erode the value of your money over time.

The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser. You may have to pay for this advice.


* The Foresters Friendly Society Long-Term Savings and Retirement Survey was carried out during August 2015 in partnership with Mature Times and completed by 1,489 people.

** Martin Lewis – Six reasons why ISAs still beat other savings accounts

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