Archive for the ‘ISAs’ Category

ISAs for Retirement Planning? – Understanding ISAs and Traditional Pension Funds

Friday, January 15th, 2016

ISA PensionsWhen you are planning your retirement you will need to decide which type of saving vehicle will best match your needs.

Whilst your ‘sunset’ years can be a great period retiring can also expensive, and when your regular paycheck stops coming you need to depend on your nest egg to match your lifestyle and expenses.

To make sure that you can not only live well after you stop working full time, but also pay for other expenses; healthcare for example, you would want to invest wisely in a retirement account.

Is an ISA Right for You?

If you choose to invest in cash ISA (individual savings account), not only will your savings work for your retirement years but you will also save on tax.

Because this type of account offers interest without taxes, it could be an ideal tax planning method. This type of investment is more stable so is better suited to those who are risk averse. The downside is that there is the chance that the interest rates will not grow a whole lot, unless you are open to taking more risks.

For people looking for a relatively safe place to invest for their golden years, this might be an option worth considering. Stocks and Shares ISA, while entailing a little more risk, also offer more returns, and the flexibility to invest as you like. It would also lead to greater degree of tax savings. There is also no time limit as to when your account is open for you to withdraw funds. Should you ever find yourself in a financial pinch you can think of using this account to rescue. However, with good financial planning, your savings should remain safe, and there should be no need to prematurely access it.

Pensions Are Still Worth Considering

Pensions have been the preferred way to save for the nest egg for decades. Pensions offer tax rebates, in that the amount you invest attracts relief on taxes, so you get to save more. The more you invest in a pension the more you stand to get as tax relief. Also, for employers that are contributing to an employee’s account, there is tax relief, and for the employee, more funds into the account. However, the planned changes to the tax rates on pension funds, would mean less savings.

Another reason to trust pension accounts is that contributions can be backdated. The contribution limits remain high, although the proposed changes to the law need to be studied in detail. You would also not be able to access the funds until a minimum age, so you would be prepared to do without the cash you saved in your hands, for at least a few years. In such a situation, you might want to consider an ISA. While the money you pay into the pension account may not attract tax, the money you withdraw will carry tax. How much you pay as tax is something your financial adviser will be able to tell you.

The Importance of Financial Advice

The New Pension Freedoms brought in by the current government have shaken up the way people plan for and enjoy their retirement. When it comes to making these important financial decisions, it is important that you seek the advice of a capable financial adviser.

The decisions you take today in regard to your savings and funds for post retirement will have far reaching consequences, for decades to come. That is why with the assistance of a financial adviser, who offers advice customised to your situation, you will be in a situation where you can face the future with confidence.

In addition to understanding the pros and cons of ISA and pension funds, you will also receive advice regarding other types of funds such as savings account, and premium bonds. You might also want to learn more about SIPP or Self Invested Personal Pension.

If you would like to speak to someone about your pension please do not hesitate to contact Maxim Wealth Management on 0141 764 0040 (Glasgow) 0203 841 9941 (London). Alternatively fill out our Contact Form with your question and we’ll get back to you.

NISAs – End of Year, Part 2

Wednesday, March 11th, 2015

NISAs - End of Year, Part 2If one of your New Year’s resolutions for 2015 was to improve your finances and ensure that you maximise your savings, the new tax year is an important time.

New increased limits on tax exempt savings pots in the form of NISAs have come into effect and in the next month NISA providers will be offering the best deals in the hope they will get your business.

Therefore, if you haven’t got an NISA already, now may be the time to open one, and if you have one already, it might be worth considering how it is performing and whether you can get a better deal?

Start your new NISA

If you open a new NISA now you have until April 6th to use up your annual tax free savings allowance, meaning that if so far if you’ve deposited nothing in any NISAs you can use the full £15,000.

If you’ve already saved money in one NISA this tax year and want to shift it over to a new account with a better rate, you are free to do so and to top it up to £15,000.

Following April 6th 2015 you will have another full tax year to invest in, and the tax free limit for 2015-16 has gone up to £15,240.

In order to make the most of the opportunity you could save regularly and realistically, and it makes sense to consider channeling as much of your spare cash as possible towards your NISA.

Create a savings plan

The more of the tax allowance you take advantage of, the better, so in order to make the most of your NISA, you need to develop a sustainable savings strategy.

Firstly, if there are major outstanding unsecured debts like loans, credit or store cards, pay them off as quickly as possible as they will eat into your wealth quicker than you can save.

Secondly, once you’ve dealt with debt, you need to conduct a one month spending diary, examining where you are paying too much or what you are spending unnecessarily on.

From this you should be able to see where your money is going and what you can cut back on, and what can be saved.

For many people, the money audit is quite a sobering experience, but it should help you realistically see what your potential for saving actually is.

Check rates on older NISA’s.

When you’ve gone to the time and trouble to audit yourself like this, it makes no sense to allow money to slip through your fingers in other ways.

Now you need to audit any of the NISAs or other savings accounts that you already have, to make sure that they are working as hard as you are.

Keeping your wealth concentrated in the NISA that has the best rate is also essential if you have stocks and shares ISA, and in this case you need to make sure that the account has the lowest fees and charges you can find.

You can move the money to a new NISA with a better rate.

If you are looking for cash NISAs with the best rate or a stocks and shares NISA with the lowest charges, you might benefit from some professional financial advice.



NISAs – End of Year, Part 1

Wednesday, March 4th, 2015

FB - NISAAs the end of the financial year approaches in April, taking stock of the performance of your savings is an essential task for anyone who wants to see their personal wealth grow effectively year on year. This blog is a useful guide to savers who invest in NISAs and want more for their money.

Tax Efficient Savings

The annual allowance that a saver can invest in an NISA without incurring tax on their nest egg in 2014-15 is £15,000 per year, and it can be divided between cash and stocks and shares, depending on your preferred method of investing.

While most cash ISAs are free to open, a stocks and shares ISA will normally incur a service fee.
It is also important to remember that high value stocks and shares portfolios can still face capital gains tax and taxes on dividends.

If you invest in shares heavily, it is essential to check the overall annual cost of your ISA, as monthly charges over time can stack up.

Savings Check

No broker, fund manager or financial advisor is a better guardian of your wealth than you are, since you are the person who cares the most about your savings.

As such, the only way to build your personal wealth is to keep a close eye on it and carry out at least an annual savings audit.

Checking up on your rate of interest, return, and any costs that might be associated with the account you have is vital.

Money is easily lost by simply assuming that it is in safe hands or that your NISA is working for you as hard as it can.

Best rates available coming up to end of tax year

The end of the tax year starts to resemble financial products ‘Black Friday’ as we move into February and March.

Banks and building societies know that you are likely to be scrutinising your investments and they offer attractive deals in the hope they can poach your custom.

With this in mind, don’t simply settle for the first NISA that comes your way, you are in a buyer’s market and you afford to hold out for a good offer.

These market conditions are unlikely to emerge for a further 12 months so it’s important to make the most of them while they last.

Maximise your investment for this tax year

If you feel you missed valuable opportunities in the past twelve months to keep your hard earned personal wealth safe from the predations of the tax man, then the end of the tax year is a perfect opportunity to make a difference.

By being proactive about managing and monitoring your savings and shifting money out of NISAs that aren’t performing into ones that are, you can save a considerable amount on larger investments.

If you are committed to making your wealth count in the coming twelve months why not seek some professional financial advice.




Making The Most Of The Recovery

Friday, May 9th, 2014

It was announced a few weeks ago that wages rose faster than inflation; a statement that coincided with the news that house prices increased on average by 1.9 percent across the country and unemployment continued to fall.

12 May Blog Promo ImageAll of this is welcome news and long overdue; as a nation we’ve struggled through six long difficult years since 2008 and whilst many are still cautious about the recovery, the signs are that it will continue.

The economic crisis in 2008 was created by governments and their policies, and it was created by banks and the companies that audited them. But it was also created by us. The great crash of 2008 was caused by a decade of spending and borrowing on the part of the general public that probably has no precedent.

Now that the return to prosperity seems to have arrived, there’s a chance for all of us to do things differently this time, and to ensure that our own personal good fortunes can be more sustainable.

During the Great Depression in the 1930s the economist John Maynard Keynes argued that governments should operate a ‘counter-cyclical’ policy, meaning that they should save during the times of surplus and spend those savings during times of dearth.

This meant that upswings never became unsustainable booms, because the government taxed wealth in order to save it, and then they could spend their way out of trouble during downswings.

There is much to be said for this common sense approach, and even the Chancellor George Osborne has pledged to run a budget surplus by 2018. Whilst Keynes was writing primarily about what governments should be doing, there is no reason why we can’t take on his advice at a personal level.

This suggests that the next few years for all of us need to be about employing a counter cyclical mind set and making simple, prudent decisions that will future-proof ourselves financially, not just for years but for decades. As the Chancellor put it recently, we need to ‘mend the roof while the sun shines.’

In too many instances in the decade 1998 to 2008, people were encouraged to believe that the good times would never end and that the low prices that globalised manufacturing could bring, along with an artificial housing boom would continue to deliver magic money.

Our sobering economic experiences, which have lasted longer than the Great Depression itself, have indicated otherwise, and there can be few illusions any more about how long the good times will last if we are careless. Here, then are some simple rules for a more sustainable future.


Britain’s economy is largely based on housing, and the property market is one of the most powerful forces pulling us out of recession. If you have decided to move recently or are hoping to add value to your property through a re-mortgage, you have to think of your decision as a key aspect of your long term prosperity.

New banking regulations being introduced this month will make it very hard for you to over extend yourself to the unsustainable levels of 2008, and if you want to borrow more ambitiously, you will need to prove that your finances have a clean bill of health.

This seems like a painful imposition, but in reality it is timely and necessary as the country gets ready to indulge in a frenzy of house buying and selling (Britain’s favourite obsession). Preventing a significant percentage of the home owning population from defaulting en mass the next time the economy runs into trouble could be one of the real golden legacies for the government.

If you have your eyes set on a dream property that will require excessive borrowing to afford, it might be the moment to ask whether it is worth saddling yourself with potentially unmanageable debt? The property has to be something that works for you, not the other way round, meaning that it needs to appreciate in value and (obviously) be a nice place to live, instead of simply it being somewhere you slave all day to afford.

Not only does this make sense in the immediate term, but also in the longer term too. Remember, when the storm hits again (and one day it will, rest assured), the ones who weather it will have assets and the ones who don’t far too well will be saddled with liabilities.


In the last budget the government announced that it would be raising the upper limit on ISAs to £15,000 from July 2014, allowing you to save far more each year without HMRC taxing the interest. In addition to this, the entire amount saved could be cash, whereas previously half had to be in stocks and shares.

To say that this has been welcome news by the savings industry is something of an understatement, and for individual savers it presents an excellent opportunity to see more returns on their wealth. Remember Keynes big idea? In a very subtle way the government is encouraging all of us to emulate his thinking and set up our own counter cyclical policy.

By saving in a regular and sustainable way and getting into the habit of tucking a little bit away each month, preferably somewhere like an ISA that is tax efficient, we can do wonders for our own financial stability. Not only could savings eventually go into sound investments like property in the future, but it is our insurance against tough times.

This all sounds rather obvious, doesn’t it? It bears repeating however, that because so few people between 1998 and 2008 saved at all, in fact quite the opposite occurred, and a relaxed credit environment led to a level of personal indebtedness of staggering proportions.


This one is simple. Pay it off as quickly as you possibly can. There is no one thing more injurious to financial health than borrowing, and if financial good times are about anything, they are about freeing yourself from this burden.

Credit cards, store cards, personal loans, and hire purchase agreements collectively represent the biggest threat to your future financial stability. In 2009, when the economy really took a nose dive, it was personal debt that was one of the first things that lenders called in, with countless customers desperate to appease ever growing queues of creditors.

There are some instances where borrowing is prudent, such as a purchase of a house or an investment in a small business, or a career development loan, but in most other instances it is a luxury that perhaps we as a society can ill afford. As a culture, most of our ideas about borrowing were formed back in more stable times (i.e. the 1960’s).

Back then the lender was more prudent and kindly and who one could meet in person and who would advise you on what you could afford to repay; in effect he acted as a brake on the system and offered advice how much to borrow.

Since the 1980s, the lending arms of certain business have not acted as advisory services so much as they have become salesmen, operating from call centre’s and looking to sell you their products (in short, to increase your personal indebtedness to them as much as possible).

Also borrowing was always predicated on the assumption that future personal financial stability was assured and that all of us would gradually become better off over time. Even though we are experiencing good times again now, there is no indication that these will last forever and it is vital that should there be another down turn, you can face it debt free.

It is true to say that we live in a very different financial world to the one we left in 2008, and most likely things will never be quite the same again in terms of our attitudes towards money, spending and saving.

This may be an unqualified good thing, as a lot of those attitudes and beliefs about money were long past their sell by date and resulted in a lot of financial pain. The past half decade has taught us some serious and challenging lessons about money and debt and now that the economy is starting to improve, we have to put those lessons into practice.

If you are thinking about getting financially fit now that the worst of the recession seems to be over, it might be an idea to see an independent financial advisor who can help you look at how you manage your money and suggest ways to make it work for you.



For more information please contact us today.

Investment Portfolio Health Check

Thursday, October 4th, 2012


Time for a portfolio health-check.  Once a financial plan has been put in place, it is tempting to believe the paperwork can simply be tucked away in a drawer and forgotten.  However, like a well-kept garden, a financial plan needs regular tending to ensure it is still on track. ‘Weeds’ can spring up or you may just like to grow something new.  What should a financial health-check comprise?

check it is still fit for purpose.  The original financial plan will have been matched to an investor’s goals – to retire at 60, say, to fund education for children or whatever.  A review will first look at whether these goals have changed, perhaps with the birth of another child, or a change of job or a surprise inheritance.  It should consider whether investors need to save more or switch to different types of investments to achieve their goals.

The Portfolio Review

A review will also look at an investor’s progress towards their goals.  It may be a portfolio has performed particularly well and it is no longer necessary to take as much risk – or the opposite might be true and an investor needs to take on more risk.  A financial health check will also examine whether the underlying investments are performing in line with expectations.  Fund managers will have good and bad periods.  A run of bad performance may mean their style is out of favour – for example, they may target larger, dividend-paying stocks while the market currently prefers small companies – but your financial adviser will be able to judge whether this is expected or whether it is a sign of a deeper problem.  It may be a manager is losing their touch, has left their employer or there are problems within the investment house.  In this case, it may be worth switching to another manager.

Investment Changes

A portfolio will also need to be tweaked according to the wider economic environment.  The 2008 financial crisis changed the investment landscape – for example, the low interest rates that have followed mean income-seekers have had to work harder to generate the same level of yield.  While an event of this magnitude will hopefully not repeat itself in the short term, it highlights the importance of regular reviews and ensuring your financial plan continues to be appropriate.  Financial health checks can ensure your garden grows abundantly in all weathers.  A little tending can go a long way.  To arrange a financial review contact Maxim Wealth Management or call 0141 764 0040.

Retirement Planning

Thursday, September 15th, 2011

When it comes to retirement planning, time is one of the most important assets you have to save for retirement.

It takes a long time to build up the investments needed to provide a comfortable retirement income and the sooner you start retirement planning and saving, the better.  Even putting a small amount away on a regular basis, if done long term, can make a difference.  Both occupational or company pension schemes and personal pensions are tax-efficient.

Your contributions to company pension schemes are deducted from pay before tax is calculated and for contributions to personal schemes, tax you have paid before you make your contribution is reclaimed for you by your provider.  In to each type of plan you can contribute up to £3,600, 100% of your net relevant earnings or £50,000 (for tax year 2011/12), whichever is the greater and you can then use your personal income tax allowances before calculating the tax you pay when that pension finally pays out.

If you work for more than one employer, a financial adviser can help you check your previous company schemes and work out what you are entitled to.  Your retirement planning might also include individual savings accounts (ISAs) which are tax-efficient ‘wrappers’ all profits earned on investments held inside them are paid out to you free of further tax.  The amount of money you can invest in an ISA is also subject to limits (£10,680, tax year 2011/12), but it is worth getting into the habit early.

If you think you could benefit from retirement planning we’d be happy to offer our services.  But don’t delay because the longer you put off planning for your retirement the less retirement income you’ll have.  Call us now on 0141 764 0040 and let’s see if you can help.  Contact Us.

A pension or an ISA?

Thursday, September 15th, 2011

Our financial advisor explains that while a pension is one of the most common ways to save for retirement, it may not be your only option for retirement income and that an individual savings account (ISA) may provide an alternative.

Difference between a pension and an ISA

One of the main differences between a pension and an ISA is in the way they are taxed. Your pension payments will qualify for tax rebates up front, at your highest rate of income tax, but then the retirement income you receive later on will be taxed. With an ISA, the money you contribute will have already been subject to tax, but any withdrawals you make will be tax free. It’s also useful to be aware that your pension income counts towards your personal tax-free allowance, while your ISA withdrawals do not.

You might think that, thanks to the tax relief, a typical higher rate taxpayer saving the same annual amount into both an ISA and a pension plan over their working life will find that by the time they reach retirement age the pension fund is larger. This is obviously fully dependent on their investment choices and tax regulations remaining consistent but the tax rebates are important as they add to the value up front and therefore influence the size of annuity that can be bought. However, the retirement income from your annuity is likely to be taxable, unlike ISA withdrawals. But, your annuity payments are guaranteed for life and withdrawing the equivalent from an ISA may eat into your capital. It is therefore possible that the ISA capital eventually runs out.

Other pension benefits include the fact that employers can pay into a company or stakeholder pension scheme, and the annual contribution limits for pensions are much higher than for ISAs. Nevertheless, an ISA is much more flexible. With a pension, you have to wait until you are aged 55 to make withdrawals, whereas an ISA can be accessed pretty much whenever you like.

With longer life expectancies, as well as some high profile issues concerning the way in which a minority of pension funds have been managed, many investors’ funds will not provide quite as much retirement income as expected. As a result, some people are now looking to boost their pension funds by topping up their company pension, or by using additional investment vehicles. One other solution however, could be to use the ISA option and help ensure your retirement income is as healthy as possible.

Your options for retirement can be complex and will depend entirely on your own personal circumstances. If you’d like to speak to one of our financial advisors about pensions or ISAs they would be more than happy to take your call on 0141 764 0040.

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