ISA

[ALT72]

I am in my early 50s and now is the time to start thinking about investing my money more. I plan to retire at 67. I am planning to invest into ISA Stocks and Shares only so I can avoid paying tax upon maturity. If, for example, in 15 years time the ISA is worth £300k, is it possible to withdraw say £15k from it each year and leave the rest in there without being penalised? I do have a small pension pot but I have only put in the minimal amount from my salary at work since I don’t trust the government as they keep changing the goalposts over the years! From my understanding, Rachel Reeves is now planning a tax raid on pensions.

The tax raid in pensions is, i believe, likely to affect higher earners by reducing the tax top up that is currently contributed by hmrc, for example 45% etc.
pensions still come out very well stacked against isas.
now is the time to pay the maximum amount into your workplace pension as this is topped up now to the max by the government and your employer. It’s also tine to make sure your workplace pension isn’t stuck in the crappy default fund and in the out ambitious fund they offer.
i would then open a S&s isa and a sipp and start contributing to them both. You then have three sources of retirement income, one of which is tax free.
this will give you choice and some flexibility. You have plenty of time to build up a good amount. Don’t forget to also plan for costs in terms of making sure you have no debt like mortgage before retirement and some easy access savings to lean on as well.

Retirement planning based on rumour of changes to political and fiscal policy isn’t a good idea.

if you are a higher rate tax payer then pension wins mathematically every time due to the tax relief paying in and the 25% tax fee lump sum which you could currently draw at 57. Downside is lower flexibility to access earlier (which could also be seen as a positive by some).

you perceived lack of trust in the government is likely meaning you are missing out now. If policy does change then you can alter your strategy accordingly.

In answer to your question - yes you can usually withdraw a set amount each year from a stocks & shares ISA without penalties (or indeed all of it if you wish).

There are certainly financial advantages to investing in a pension. But, there are some people who, for whatever reason, are not comfortable with the current, and possible future, restrictions of a pension product and opt for a S&S ISA instead. Whilst it might reduce your overall returns, it does give you greater control and flexibility in accessing and managing your capital.

https://blog.moneyfarm.com/en/financial-planning/how-to-become-an-isa-millionaire/