Retirement Planning - Pension or Lifetime ISA

In this retirement planning video, I’m going to give you a quick explainer of the rules of Lifetime ISAs, compare them to pensions, and then we’re going to end up with a kind of do this-then-that order of operations.

Remember there are chapter markers under the video so you can jump ahead if you want to.

Can I ask you for a favour? If you find these retirement planning videos useful, hit the like button and subscribe if you haven’t already. It really helps, so thank you in advance!

#meaningfulmoney #meaningfulacademy #retirementplanning

🏷️ Use PROMO Code "YOUTUBE" to save on any of the three courses.

Chapters:
00:00 Welcome
00:41 Introduction
01:13 How Lifetime ISAs work
03:22 Comparison with pensions
05:44 Flexibility - The Lifetime ISA nudges ahead
07:48 Why pensions win in almost every other regard
10:15 When should you pay into which?
11:48 Conclusion

The MeaningfulMoney Community (Facebook):

FOLLOW ME:

⚠️ IMPORTANT: Please be aware that MeaningfulMoney does NOT endorse or recommend ANY people or businesses claiming to be experts in crypto or other investments. We would never recommend you any investment strategies within the comments section. Please protect yourself against spam and misleading information from fake accounts and please do not share any private or sensitive information.

📫 Leave me a comment below - I read all of them and love hearing from you!

[matthewpowell]

Great video, really helped me to make a decision on what pension to invest in for the future.

[colbysmith]

Thanks Pete, this really cleared a few things up for me

[LiamR]

Hi Pete,

I have a LISA with Nutmeg. You don't get the bonus at the end of the tax year. I've always received it on a monthly basis.

[ScipioAfricanus]

Great video as always, I have a DB pension through work and and LISA with aj bell. I cannot speak for other providers but AJ Bell pay bonuses within 4-8 weeks typically so a lot sooner than end of the tax year. I think they both have a place in many peoples lives especially those younger and earning at basic rate income tax. Thank you again

[paulthomas]

Excellent advice on a range financial senarios

[wannabemusician]

an easy 11/10 for the info supplied here 👍

[Witty.Coding]

Top quality video. Really helped understand everything 👍🏼

[johnwinwood]

Hi Pete, I'm enjoying and learning a lot from your content. With salary sacrifice pension something potentially not taken into account is National insurance savings with the employer passing on 100% of their saving. The maths then appears to favour pensions? LTA is also something to then factor in for those who may reach it due to increased contributions.

[Stephenreeve]

Would you be able to do a video comparing the pros and cons of investing in an ISA (no restrictions on withdrawals), investing in a LISA and investing in a pension (both of which are restrictive as to the age you can withdraw)?

I’m torn between the 25% bonus of a LISA but not being able to access that money until age 60

[estherfco]

Great video! Just a doubt you say if you are a higher rate tax payer 100% it would be best to put more money into the pension, to get tax relief but then you said if you can do both LISA and more into pension to get tax relief? But if you have lets say £8k would it be better do half/half or keep adding into the pension up to the £40k threshold? Thanks

[MattFo]

Is it worth paying more than my employers contribution to my work pension? (I currently do by a few %)

And am I better off just matching it and opening a Lifetime ISA which is invested into a global market for example instead with the extra? Currently i have a S&S ISA which I’m thinking of changing into a LISA or SIPP to have aswell as my workplace pension

[jonathanhowson]

Pete, I pay 20% so 25% with employer contributions into my pension and £333 a month into my LISA. The pension is also done before NI contributions. Im saving up for 2 big projects on my house over the next 2 years, which are about £25k each. Do I stop paying into the LISA, for 2 years as I am already saving heavily for retirement, or do I man up and find another way to earn the addition all money. I am already living on 'rice and beans' and drove a 14 year old Toyota aygo.

[amymanning]

Im looking to buy my first home, but i dont know how long it will take me to save. I dont know if its worth getting a stocks & shares LISA, or cash LISA to do this. It would be fab to have a video around this topic! Also, with house prices going up, and LISAs being capped at £450, 000 (and that price not going up with inflation), is it worth using a LISA to buy a property? ir is there a better way?

[Bobbitfish]

Hi - my younger sister is 17, about to turn 18 and then I imagine earning relatively little over the next 5-8 years as she starts university and then gets herself into some form of a career . I', thinking it would be a smart move to set up set up a lifetime ISA for her as she won't likely be adding towards any pensions soon.... The only thing is I'm not sure even a small flat in our area (Herts/London) would be <£450k by the time she has deposit money. I wouldn't want her to have to sacrifice savings.

Does it seem likely they will increase the cap?

[uthlhis]

Great shows and information could you do a show on fixed indexed annuitys

[pm]

Great video! I would be grateful if you could advise what's best for me..37 year old.. started pension contributions age 27, currently 45k pension pot. I earn 38k and i sacrifice 18% monthly from my salary into my employers pension scheme ( the biggest i am allowed) they pay 5% only. Am i doing the right thing? Or shall i decrease my contributions to 5% or 10% and invest the remaining in a SiPP or stocks ans share isa or lisa? So confused here😮

[Meelenko]

Fantastic presentation Pete. While I remember Lehman Brothers, I am new to UK tax rules - bingewatching your videos is essential 🙂.

I wonder if Lifetime ISA would be the best option for people with meaningful cash/investments already on their personal account - outside a tax wrapper? Would putting 4K of it (or 8K as a couple, or 12K with a kid) into stocks & shares Lifetime ISA every year and getting 1K on top be a reasonable option if we are quite sure the remainder (16K per person per year) in ordinary ISAs would be enough for any future emergencies?
Furthermore, as we put most of future surplus income (small business owners) into SIPP before taxes, and take out slightly more than living expenses, after-tax money for investing will dry up. Could one then withdraw cash from ISA account, put precisely 4K in lifetime ISA, and still get a 1000 extra every year until 50?
Perhaps a cheeky video: "Your grandma died, you've hit a loterry, you sold your start-up: how to efficiently tax-wrap all that cash?" What to do at 5K, 50K, 500K...
Thank you for all you do!

[adam]

There's also the ease of a pension LISA. If I've got 500 in savings to shift then it's much easier to put into the lisa myself rather than deal with my work place finance team to overpay (to not pay tax on it or do extra paperwork).
Although more realistically an extra £100 a month when flush Vs when the boilers gone bust

[michellehutchinson]

Hi I found your videos really do help. I have a final salary pension (one of the lucky ones to still have this) I own my own home already, would you recommend a LISA or something else?

[aldotube]

So if you aren't buying a house in the near future then max out you pension contribution with your employer then anything about that use on lifetime isa or other investments