Commercial feature

The day you retire is finally in sight, and it’s a moment you’ve been dreaming about for years. But whether you want to travel or just potter around the garden, chances are your plans will be affected by how much money you have at your disposal.

Traditionally, people saved into company pension schemes and these provided all the money they needed for a comfortable retirement. However in recent years, big businesses are finding final salary pension schemes increasingly difficult to sustain and are looking to close them.

And there’s another reason that a pension alone may not provide the kind of luxurious lifestyle you’ve imagined. According to research carried out in February this year by Moneyfacts, quoted by the BBC, the dotcom crash and credit crunch affected investments to such an extent, the value of an individual’s pension has fallen by 72% in the past decade.

However, it’s not all bad news for those saving for retirement. There are many tools and strategies the over-50s can use to build up their nest eggs, without relying on personal or work-based pensions.

One of the most important (and popular) ways of boosting retirement savings is the Individual Savings Accounts, or ISA.
In fact almost two-thirds of ISA customers surveyed say they are using them solely for this purpose, according to This Is Money.

The big advantage of ISAs is that all returns are free of UK income and capital gains tax (although with stocks and shares ISAs, you will be taxed 10% on any dividends paid by companies to their stock holders).

And the good news is that in April 2009, the government announced that the amount people could save into an ISA would increase from £7,200 to £10,200. For those aged over 50 by 5 April 2010, this came into effect during October 2009 while everyone else will have to wait until 6 April this year.

These new rules are great for the over-50s, giving them additional scope to take advantage of these tax breaks.

Finding the best ISA deals can still be a challenge though, and which type of ISA you choose all depends on your circumstances.

Cash ISAs offer security – you will get the money you invest back at the end of the day. There are some great cash ISA rates available, and most accounts pay interest above the Bank of England base rate. Stocks and shares ISAs can offer better returns, but may not have the security, since stock values can fall.

Cash ISAs can be offered with easy access, which means you can get at your money at short notice, but with these you may not get the best rate. Equally, you can lock your money away for a fixed period and get a better rate, but you may not get the flexibility you need.

And the savings options for the over-50s don’t end there. At the moment, because both government and large companies are attempting to raise cash as a result of the credit crunch, there are some attractive corporate and government bonds available.

These can be bought under the auspices of an ISA, so interest earned is tax-free, although bonds are bought for a fixed term and do not allow easy access to your money. But unlike stocks and shares, they cannot lose their value.

But what should you do if you’re still unsure of the best way of planning for your financial future? There are many bodies you can turn to for advice. Many of the big banks like Barclays offer financial planners who can assess your needs and put a financial plan into action.

To find an independent financial advisor, contact the Institute of Financial Planning. For more advice about pensions, contact The Pension Advisory Service.

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Barclays is a major global financial services provider engaged in retail banking (current accounts and savings accounts), credit cards, corporate banking, investment banking, wealth management and investment management services, with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 140,000 people. Barclays moves, invests and protects money and provides personal loans, home insurance, life insurance , mobile banking and other services for over 49 million customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.co.uk