alternatives to pensions

What are the Alternatives to Pensions?



Posted on: 10th May 2022

Not everybody qualifies for a workplace or state pension, which makes understanding what other alternatives to pensions you have to be able to retire successfully later in life. There are a few different retirement saving alternatives and options to talk about with your financial advisers. 


One of the most common alternatives to pensions, and preparing for later life through retirement planning Cheshire, is an Individual Savings Account, known as an ISA.  These are personal savings pots which can be used for things like your retirement, or other avenues such as buying a house.

There are different types of ISAs spanning cash, stocks and shares, innovative finance and lifetime ISAs – all with different benefits and conditions. A lifetime ISA, for example, does not allow you to withdraw the funds until you are aged 60 or over, are buying a home or fall into the terminally ill bracket.

Investing in an ISA is among the most flexible ways to save for your retirement as you can save up to £20k every tax year across a variety of ISAs or a single product. You also won’t pay tax on the interest or income or capital gains from these assets within them. You will be able to access better interest rates if you tie your money up for a set period. It is recommended that you discuss this avenue with independent financial advisers Manchester before committing to them to understand how to best use your ISAs.


For those who max out their ISA allowance and continue to look for a tax-efficient investment opportunity away from pensions, a Venture Capital Trust (VCT) offers a range of tax incentives of 30%.

These are a bit more complex than standard investments and do come with a degree of risk that you should fully discuss with your independent financial advisers Cheshire. VCTs are also not a suitable avenue for everyone but can prove very useful as a tax-efficient complement.

For those investors hitting their pension allowance limits, a VCT helps them to put savings to work and enhance their retirement income tax efficiently. This is a great way for those approaching their end of working life and who want to optimise their retirement financial strategy.


Much like VCTs, Enterprise Investment Schemes (EIS) should not be considered as a full-on replacement for a pension. They can, however, much like a VCT, add to the retirement planning strategy as they offer inheritance tax relief, as well as loss relief and capital gains tax deferral.

Investing in start-up or early-stage companies can be an exciting prospect, and highly lucrative should they be successful. This will however involve your financial advisers to ensure that your risk is covered and understood.

In light of the ever more complicated retirement planning sector, these particular schemes could alleviate the stress of what to do with your pension situation and offer some very welcome tax breaks along the way.

Contact the team at Haven IFA today to get the best pension advice Manchester or alternatives to pensions from the best independent financial advisers UK.