In todays video we will be comparing Investment ISAs (Stocks and Shares ISA) with Self Invested Personal Pensions (SIPP) and discussing the pros and cons of each.

When can I access the money?

With an Investment ISA you can take money out at any time, whereas you can only take money from a SIPP when you’re 55 and this rises to 57 in 2028.

How much can you contribute?

In an investment ISA you can contribute £20k each tax year.

In a SIPP you can contribute 100% of your annual income each tax year, up to the maximum annual allowance of £60,000. 

What happens with Tax?

Investment ISA

When you invest in a Stocks and Shares ISA, there's no income tax to pay on any dividends or interest generated, and no capital gains tax if you make a gain when you sell your investments.

SIPP

Provided you're a UK resident and under the age of 75, if you put money into a personal pension or Self Invested Personal Pension you'll be able to get a top-up from the government. It's called 'tax relief' and is paid directly into your pension plan. Tax relief is given in this way at the basic rate of income tax, which is currently 20%. So if you put £800 into your SIPP you would receive £200 from the government.

Higher and additional-rate taxpayers can claim back a further 20% and 25% respectively via the self-assessment process. The first 25% can be taken as a tax-free lump sum. The remainder of the drawdown pot is taxed like normal income when you withdraw it.

Investing Qualifications I hold:

International Certificate in Wealth and Investment Management (Chartered Institute for Securities & Investment)

***Books I've Enjoyed***

How to Own the World by Andrew Craig: [ Ссылка ]
The Psychology of Money by Morgan Housel: [ Ссылка ]
The Warren Buffett Way by Robert Hagstrom JR: [ Ссылка ]
Naked Trader by Robbie Burns: [ Ссылка ]
The Little Book of Common Sense Investing by John Bogle: [ Ссылка ]

I make videos on investing, personal finance, growing wealth, financial independence, budgeting and saving money. Let me know in the comments what you’d like to see next!

DISCLAIMER

Any information given in this video is for entertainment purposes only, and does not act as legal or financial advice. Your financial decisions are your own responsibility, and if you do require advice please contact a qualified Financial Adviser, Wealth Manager or Financial Planner.

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