@@ikennailozue708 this is a general investing account and is also often called a Fund and Share Account. Basically, it's an account that you can invest into if you have more than £20K to invest into per year. It helps you use your other allowances outside of a tax free account like a Stocks and Shares ISA.
I am following Dave Ramsey’s plan, he suggests investing 15% of your annual income into retirement. I have been struggling with how to go about this in the UK. Your video has been a big help, I’m going with the S&S ISA on top of my work pension. THANK YOU!
Considering pensions as a Limited Company Director of a property company sadly the Government don’t treat my income from renting out property as allowable as it’s (investing income?) so the most you can contribute and still get relief is just £240 a month but it’s still worth doing I use a Vanguard SIPP personally.
Hey I’m going to be purchasing a investment property, wanted to know does this mean you having a SIPP is no different to someone whose not a director of a ltd. If this is the case I think I will continue to max out S&S ISA as for investment properties I’d need that money on hand, although I might consider getting a SIPP because I am going into a field of work I will enjoy but that’s in the hopes they match my contributions.
@@phm6118 Hi Your new employer is unlikely to contribute to your personal SIPP however they will most likely have their own DC pension if they’re doing matched giving at least contribute to the max they will match when / if you leave them you can then transfer to your own SIPP and manage yourself as I did with my company DC.
What of where the high income individual is opting for salary sacrifice into pension but still wish to retire early. What would be the best approach? Should they stop salary sacrifice (even though they will be taxed at 40 or 45%) and focus on Stocks and Shares ISA?
Great video Ken. There are lots of videos on this topic that are US based but I’ve not really found any good UK ones, until now, so thanks. Maybe worth clarifying if your order of operations you mean exhausting the pension contributions or simply maxing them out so that you get the full employer match and then utilising the stocks and shares isa so you then benefit from the flexibility and availability of the money rather than trying to max out the full pension allowance, unless that’s your thing 😊. Great insight into the LISA. Seems like it is pretty pointless for a higher rate tax payer other than maybe slightly more control of investment options than the pension. Very helpful insight.
Thank you for this video Ken and Mary. I've just combined my pensions using Pension Bee following you mentioning them. Looking forward to learning more about all this!
Thanks for this insightful video Ken. I am in a higher tax bracket and I do employer match and have my own SIPP with Vanguard then an ISA and other GIA but not thought about a LISA much as I didn't think it was worth it for me. Thanks for letting me know I am doing just fine 🥰😁😁😁
Out of curiosity, why do you suggest Stocks & Shares ISA above a LISA? The ISA total is £20k per year (I assume the £4k LISA is included in our yearly limit), would it not be worth maximising that and then the Stocks & Shares ISA as your still maxing out the £20k but the Government give you a £1,000 bonus, thus turning the yearly maximum potentially being £21k per year?
Hi Christopher, this really depends on your goals. If your primary goal is saving for retirement and you're happy for a portion of your retirement pot to be in a LISA till age 60 without access, then ofcourse you can do that. What I'm sharing is a guide, which you can tweak even more given your personal situation. My preference for Stocks and Shares ISA is really down to the much larger allowance, flexibility and access to money.
Great video, thanks! Stocks & Shares ISA question: is my yearly 20,000£ allowance defined by the amount of money I pay in or defined by the value of the stocks & shares I hold? For instance, if I pay in 19,000£ and then a month later the market value rises to 21,000£ because the stocks do well - am I still within the allowance or have I exceeded it? Many thanks!
you forgot talk about lifetime allowance for pension, I am a high tax payer if I add only in pension I will go higher than 1 million in my pension by the time, because this for me is good add something in LISA, I not understand why you say ISA is better the LISA both are stock shares and you get 25% extra for compound.
You recommend investing first in a stocks and shares ISA for a basic rate tax payer employee whose employer does not match contributions (scenario 1A); however with significant employee pension contributions, there are substantial gains associated with salary sacrifice due to lowered national insurance contributions. Do you think that in that case high pension contributions with salary sacrifice is a good alternative to a S&S ISA?
Yes, provided you have not yet started Withdrawing from your Pension. I say this because the maximum amount that you can pay into a pension decreases massively the minute you start Withdrawing from your pension.
Hey Ken, thank you for this really helpful video, I was wondering if you’d still recommend that I ask my employer to match my pension if I put in 1.6% and they put in 6%. This feels like a really good rate I’m getting, but obviously my contribution is low, so I was thinking of opening a LISA to maximise contributions (I already have a S&S ISA) thanks!
A relative receives state pension and some benefits, doesn't work anymore. He doesn't have any personal pension. Can he pay into a SIPP for example, leave it as cash, then withdraw? This way he'd get the top up with no tax issues yes?
Enjoy it? Don't forget to LIKE & SUBSCRIBE 😊. Feel free to ask questions below
Interesting video. What is a 'dealing account' and can you please give examples?
@@ikennailozue708 this is a general investing account and is also often called a Fund and Share Account.
Basically, it's an account that you can invest into if you have more than £20K to invest into per year.
It helps you use your other allowances outside of a tax free account like a Stocks and Shares ISA.
I am almost one year into my FI journey and still feel like there's loads to learn. Thank you so much, this is really helpful ☺
Yes, always be learning 😊. Focus on any learning that gives you that earnings upside and this goes beyond just investing money.
I am following Dave Ramsey’s plan, he suggests investing 15% of your annual income into retirement. I have been struggling with how to go about this in the UK. Your video has been a big help, I’m going with the S&S ISA on top of my work pension. THANK YOU!
You're most welcome, Amelia 😊
Considering pensions as a Limited Company Director of a property company sadly the Government don’t treat my income from renting out property as allowable as it’s (investing income?) so the most you can contribute and still get relief is just £240 a month but it’s still worth doing I use a Vanguard SIPP personally.
Hey I’m going to be purchasing a investment property, wanted to know does this mean you having a SIPP is no different to someone whose not a director of a ltd. If this is the case I think I will continue to max out S&S ISA as for investment properties I’d need that money on hand, although I might consider getting a SIPP because I am going into a field of work I will enjoy but that’s in the hopes they match my contributions.
@@phm6118 Hi Your new employer is unlikely to contribute to your personal SIPP however they will most likely have their own DC pension if they’re doing matched giving at least contribute to the max they will match when / if you leave them you can then transfer to your own SIPP and manage yourself as I did with my company DC.
Exactly the video I needed. Thank you!
You're most welcome 😊
What of where the high income individual is opting for salary sacrifice into pension but still wish to retire early. What would be the best approach? Should they stop salary sacrifice (even though they will be taxed at 40 or 45%) and focus on Stocks and Shares ISA?
Great video Ken. There are lots of videos on this topic that are US based but I’ve not really found any good UK ones, until now, so thanks. Maybe worth clarifying if your order of operations you mean exhausting the pension contributions or simply maxing them out so that you get the full employer match and then utilising the stocks and shares isa so you then benefit from the flexibility and availability of the money rather than trying to max out the full pension allowance, unless that’s your thing 😊. Great insight into the LISA. Seems like it is pretty pointless for a higher rate tax payer other than maybe slightly more control of investment options than the pension. Very helpful insight.
Thank you for this video Ken and Mary. I've just combined my pensions using Pension Bee following you mentioning them. Looking forward to learning more about all this!
Thanks for this insightful video Ken. I am in a higher tax bracket and I do employer match and have my own SIPP with Vanguard then an ISA and other GIA but not thought about a LISA much as I didn't think it was worth it for me. Thanks for letting me know I am doing just fine 🥰😁😁😁
You're most welcome 😊
Great comprehensive video. going through the various scenarios makes it so relatable and easy to understand. This was invaluable. Thanks Ken.
You're welcome, Rumbi 😊
Thanks so much for this! I wasn't sure about dealings account and now I feel a lot clearer.
👊🏾
Great video. And very clear breakdown. I need some order in my finances.
Thank you 😊
Out of curiosity, why do you suggest Stocks & Shares ISA above a LISA? The ISA total is £20k per year (I assume the £4k LISA is included in our yearly limit), would it not be worth maximising that and then the Stocks & Shares ISA as your still maxing out the £20k but the Government give you a £1,000 bonus, thus turning the yearly maximum potentially being £21k per year?
Hi Christopher, this really depends on your goals. If your primary goal is saving for retirement and you're happy for a portion of your retirement pot to be in a LISA till age 60 without access, then ofcourse you can do that. What I'm sharing is a guide, which you can tweak even more given your personal situation.
My preference for Stocks and Shares ISA is really down to the much larger allowance, flexibility and access to money.
Great video, thanks! Stocks & Shares ISA question: is my yearly 20,000£ allowance defined by the amount of money I pay in or defined by the value of the stocks & shares I hold? For instance, if I pay in 19,000£ and then a month later the market value rises to 21,000£ because the stocks do well - am I still within the allowance or have I exceeded it? Many thanks!
Hey Alex, it's defined by how much you pay in 😊
you forgot talk about lifetime allowance for pension, I am a high tax payer if I add only in pension I will go higher than 1 million in my pension by the time, because this for me is good add something in LISA, I not understand why you say ISA is better the LISA both are stock shares and you get 25% extra for compound.
You recommend investing first in a stocks and shares ISA for a basic rate tax payer employee whose employer does not match contributions (scenario 1A); however with significant employee pension contributions, there are substantial gains associated with salary sacrifice due to lowered national insurance contributions. Do you think that in that case high pension contributions with salary sacrifice is a good alternative to a S&S ISA?
Hello Ken, Thank you for a detailed video.
Do these strategies apply if you are 55 plus and want to retire on £4000 per month? Thank you
Yes, provided you have not yet started Withdrawing from your Pension.
I say this because the maximum amount that you can pay into a pension decreases massively the minute you start Withdrawing from your pension.
Excellent. Thank you.
Thank you for watching 😊. Please share with others
Thank you.
You're welcome :)
Hey Ken, thank you for this really helpful video, I was wondering if you’d still recommend that I ask my employer to match my pension if I put in 1.6% and they put in 6%. This feels like a really good rate I’m getting, but obviously my contribution is low, so I was thinking of opening a LISA to maximise contributions (I already have a S&S ISA) thanks!
Great video, thank you!
Thank you for watching 😊. Please share with others
A relative receives state pension and some benefits, doesn't work anymore. He doesn't have any personal pension. Can he pay into a SIPP for example, leave it as cash, then withdraw? This way he'd get the top up with no tax issues yes?