Could a Modular GIA Buy You That New House?

Written by Karen Bryan

shtland house by lochWhether you’re old or young, it’s hard to escape the constant poke from people around you giving you advice on your pension. Many people have dreams about what they’re going to do with their retirement funds – whether it’s buying that dream holiday home, investing your money into your favorite hobby, or renewing your vows – it all costs money, and you’ll need to ensure that the pension plan you do eventually take out is enough to give you the lifestyle that you want.

You might therefore assume that a straightforward privately owned pension – in addition to the state pension you receive – will be enough to get you through those golden years. But actually, there could be better solutions available that you’ve never even heard of. One potential one is the Modular GIA, and in this article, we explore whether it could help you to have the pension pot you need to invest in your dreams.

The Problem with Your Average Personal Pension

In general terms, a privately held personal pension is a relatively generic sort of savings device. They (at this current time) don’t generate huge amounts of interest, and you can only draw out of this sort of pension when you’re over 55. This means that if you have an urgent and responsible use for your money and you’re in your early 50s, a personal pension won’t facilitate you drawing out from it.

Introducing the Modular GIA

In contrast to a personal pension fund, a General Investment Account (or GIA) is an investment fund that is not only more flexible, it is also capable of accruing more interest than a general pension.

In essence, a modular GIA like the ones available from JamesHay is a way to hold a basket of investments in a direct manner, without the use of any kind of wrapper such as an ISA or, indeed, a pension. What this means is that baskets of bonds, shares or other investments that you own are all placed in the same bundle – the GIA – and your panel of investment managers convene with you to ensure that your investments are being carried out the way you want them to be. Moreover, the GIA doesn’t face the problem of the over 55 draw out that a personal pension does, so if you’re looking to fund that dream project of yours earlier on in life and you have a GIA, that’s totally fine.

Ultimately, then, a GIA is a relatively secure way to generate wealth for your retirement without resorting to a personal pension. You can draw out funds how and when you want, and a GIA is likely to generate more interest than a regular pension. It’s therefore well worth investigating further.