ISA

ISAs can be used to save for anything – including retirement, so they're useful alongside a pension. There are limits to how much you can pay in each year though and the tax benefits work in different ways from pensions. 

  • Allow short or longer-term saving
  • Can be used for anything – including retirement savings
  • No tax relief on money paid in
  • No tax on growth or when you withdraw money.

The value of an ISA will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested. An investment in a stocks and shares ISA will not provide the same security of capital associated with a cash ISA. The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.

There are two types of ISA (please note, Aegon don't see a cash ISA) :

Cash ISA

  • A savings account that earns tax-free interest
  • Typically less risky but their growth potential is linked to interest rates.

Stocks and Shares ISA

  • Tax-efficient
  • No tax on any dividends received
  • Profits exempt from capital gains tax
  • Invest on stock market and have greater growth potential
  • Come with risk of losing money if markets fall.

Both kinds have a pay-in limit each tax year. Find out the limits at HMRC(Opens new window).

The value of an ISA will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested. An investment in a stocks and shares ISA will not provide the same security of capital associated with a cash ISA. The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.

Retiready from Aegon

Find our more about taking control of your pension and ISA with Retiready.

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