Is a pension or ISA best for retirement savings as a basic rate taxpayer?

If you’re a basic rate taxpayer, which currently means you’re earning less than £50,270 a year and enjoy basic-rate tax relief, and you’ve got some spare income to invest, which should you choose – a pension or an ISA – for your retirement savings?

I spell out the difference for basic rate taxpayers both whilst working and in retirement of pension vs ISA saving.

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If you're planning your retirement and want to make the best use of your wealth to provide for your family throughout retirement and beyond, or work out how best to pay for a loved one’s care, I may be able to help you.

As a Chartered Financial Planner at boutique retirement planning practice, MFP Wealth Management, I help successful people retire with complete confidence.

This video is for information and entertainment only. Nothing on this channel constitutes financial advice. Please do not make any decisions based on the contents of my videos; seek professional independent financial advice first!

[TheRetirementCafe]

If you're a basic rate taxpayer planning for retirement, are you better off contributing to a pension or ISA?

[galaxianx]

Ive heard or read nothing of pension tax relief reducing to 19%. When did this happen?

[manishrana]

Sipp is the way to go, delayed gratification is sweeter .

[Mr]

Its not right to assume no growth, compounding the SIPP with more going in initially will make make the pot much larger over time and will create a larger differential. Even after taxation. Also the SIPP will be treated differently for IHT, not forming part of your estate, which is another major advantage of a SIPP.

[kaxar]

It depends on the age of Jake and Simon. What if Jake is 30 and Simon is 50? Would a ISA or a pension be the best investment?

[roblowry]

If you are a basic rate tax payer, once you are 55, does that make the SIPP even more attractive as you don't have the worry of it being locked away and can't access it? Many thanks

[pm]

Great video! I would be grateful if you could advise what's best for me..37 year old.. started pension contributions age 27, currently 45k pension pot. I earn 38k and i sacrifice 18% monthly from my salary into my employers pension scheme ( the biggest i am allowed) they pay 5% only. Am i doing the right thing? Or shall i decrease my contributions to 5% or 10% and invest the remaining in a SiPP or stocks ans share isa or lisa? So confused here😮