Common Money Mistakes and How to Avoid Them

Rules around pensions, tax, ISAs, wills and insurance can be confusing and misconceptions are rife

Holly Black 16 November, 2018 | 10:14AM

Financial advice checklist

The world of finance can be a difficult one to get to grips with – it can often feel as though the rules around taxes and pensions are constantly changing. It’s common to have misconceptions about important money moments – here are some of the ones everyone should know:

You may have to pay tax on your pension income

Pensions are billed as a tax-free way to save for retirement, but it’s not as simple as that. With pensions you pay no tax on the money you save, but you do pay tax at your usual marginal rate when you come to draw the money out as income. Pensions are the opposite to ISAs in that respect – with ISAs you have paid tax on the money you save into the account but the money you take out is tax-free.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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