What are the most tax-efficient ways of saving and investing? From ISAs to pensions, you have various options when it comes to minimising how much tax you pay.
Read on to find out more about how each option works, and what they could mean for your money.
Individual Savings Accounts (ISAs)
When you save money into an ISA, almost all of the potential growth in ISAs is tax free. In some cases, this means you can earn interest and withdraw cash without being taxed.
The annual ISA allowance for 2020/2021 is £20,000. You can save up to this amount within the current tax year in one ISA or split between different types of ISAs, such as investing in a Stocks & Shares ISA while also adding some savings to a Cash ISA.
Investing in a pension gives you several tax advantages:
- You get tax relief on the money you pay into your pension.
- Your pension grows virtually tax free.
- You can take part of your pension pot as a tax-free lump sum.
It likely there will be an inheritance tax due on your estate when you pass away. We've provided a link below to the Government's site. This is for information purposes only. Standard Life accepts no responsibility for information contained in the site or for the site not being available at all times.
The value of investments can go down as well as up and you could get back less than you paid in.
Laws and tax rules may change in the future. The information here is based on our understanding in April 2020 and your personal circumstances also have an impact on the taxes you pay.
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