Retirement planning: Pension or ISA?

By Rachel Efetha, Chartered Financial Planner with Anstee & Co.

I have £15,000, should I invest in a Pension or an ISA?

If you don’t have other needs for this money such as paying off a debt and if you can afford to ‘tie’ the money up until you reach the age of 57 then pension wins every time.  £15,000 into an ISA is £15,000 invested.  £15,000 into a pension is £18,750 invested thanks to basic rate tax relief, (with the caveat that you have earnings of more than £18,750 plus whatever regular payments you’re making into pensions to obtain the tax relief).  So, you get a bonus of £3,750 on day one, plus 14 years of investment returns on that £3,750.  If you’re a higher rate taxpayer, then you’ll get a further £3,750 higher rate relief when you complete your tax return – it’s a no brainer for retirement planning!

What should I do next?

This would be a good time to sit down and have a good think about retirement.  At what age do you want to have the financial freedom to be able to stop working (but equally carry on working if you’re still having a good time).  What do you want to do in retirement?  How much money do you need in retirement to cover the basics, and how much money do you want to cover the fun stuff?  That’s where a Financial Planner can add value – the pension or ISA is just a vehicle to get you to that point.

How Anstee & Co can help you with retirement planning.

We are a firm of Independent Financial Advisers (IFA’s). This means that the financial advice we offer is unbiased. Our experience covers all aspects of financial planning including, Investments, Pension, Estate Planning and Mortgages. To find out if we can help you why not contact us today? The initial “getting to know you” meeting is at our expense. We would love to have a chat over a coffee.

Our Head Offices is located at-

• Kettering, Northamptonshire

Additionally, our financial advisers live and make use of meeting rooms in-

• Bedford
• Market Harborough
• Raunds
• Wellingborough
• Northampton

We make full use of video conferencing facilities such as-

• Zoom
• Microsoft Teams
• Facetime

Also, we can arrange a conference telephone call. The choice is yours. There is no need to visit an office as all work can be handled remotely.

So, if you have any thoughts or comments on this article, “Retirement planning: Pension or ISA?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).