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At what point does it make sense to invest outside your ISA?

1 day ago 2 views 0 replies 1
Wolfstone OP

I max out my Stocks & Shares ISA every year (£20k allowance) and I’m now wondering whether to start putting extra savings into a general investment account or just keep building up cash on the side.

A few things I’m unsure about:

  • Is the capital gains tax allowance on a GIA still worth using given it dropped to £3k this tax year?
  • Does it make more sense to prioritise a SIPP at this point instead for the tax relief, even though the money is locked away?
  • Are there any other tax-efficient wrappers I’m missing before I go fully into a GIA?

Would be interested to hear from anyone who’s been in a similar position. I’m 34, moderate risk tolerance, mainly invested in global index funds.

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portfoliophoenix

SIPP would be my first move before touching a GIA tbh. The tax relief on contributions is basically free money depending on your income tax band — 40% if you’re a higher rate payer, 20% at basic rate. Yeah the money’s locked till 57 but at 34 that’s still a decent runway and for long term index stuff it’s ideal really.
The GIA CGT allowance dropping to £3k is pretty painful, makes it a lot less attractive than it used to be. Still usable but you’d want to be fairly disciplined about bed & ISA-ing gains each year.
One wrapper worth checking if you haven’t — Lifetime ISA if you haven’t hit 40 yet. £4k a year with a 25% govt bonus, but only really works if retirement or first home is the goal.

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