With pensions capped, offshore regular investment accounts offer a tax-efficient alternative for savers.
Many investors are facing the prospect of not being able to make further pension contributions or accrue additional pension rights without breaching the new lifetime allowance of £1.5m. Added to this is the Chancellor's decision to effectively stop investment in UK-qualifying savings plans. So, what are the regular savings options now available to those affected?
Planning for the future
Individual savings accounts (ISAs) should be viewed as the optimum savings vehicle after pensions, but another option that may appeal to longer-term savers wishing to save more than the annual ISA allowance is an offshore regular investment account.
An offshore regular investment account can form part of a long-term financial plan and cater for a variety of scenarios such as expatriate life, career breaks and school/ university fees, as well as help with early retirement. Savings can be linked to a range of investment funds run by leading fund management groups and can be stopped at any time.
Tax advantages
The principal advantage of an offshore regular investment account is that savings accrue in a virtually tax-free environment. Tax is deferred until withdrawals are made, but can be managed in such a way as to mitigate the ultimate tax liability. So, as the old accountancy maxim goes, tax deferred is tax saved!
A safe haven
With the ability to save tax efficiently being attacked in the pursuit of increased tax revenues, these non-controversial regular savings arrangements should be considered as part of an overall financial plan for those wishing to save for the future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
