Ankit wanted to ensure he could save for a deposit on a flat so started saving into a Workplace ISA through his company where he could make payments through payroll.
ISAs are tax-efficient investment vehicles and a great way of providing an attractive benefit for employees within a flexible benefits package.
The restrictions to pension tax relief for higher earners and the desire to offer all employees additional savings choices have increased the demand for Workplace ISA. See Pensions Tax changes for more details. Employees are likely to have different savings priorities depending on their personal circumstances. Whilst a pension is likely to remain as an integral part of longer term savings a more flexible savings choice is now required.
Some employees will have shorter term priorities, for example saving for a home, whilst senior employees may be affected by the restrictions to pension tax relief and so require a savings alternative.
An ISA currently provides the opportunity for individuals to invest up to £890 per month or £10,680 a year tax efficiently.
The WEALTH at work Workplace ISA is designed specifically for the workplace. Its benefits include:
- A link to HR and payroll
- Potential to hold corporate stock
- Fund choices may replicate your company pension scheme
- No initial charges for regular contributions
- Able to transfer shares from all employee share schemes
- Facilitate share scheme diversification
- Delivered via a bespoke website
In summary the principal benefits of the Workplace ISA are:
- An accessible short and medium term savings choice for all employees
- A tax efficient alternative to pension for higher earners
Please see Workplace ISA for more details.
