Pension vs ISA - So many people get this WRONG!

#meaningfulmoney #meaningfulacademy #retirementplanning
Pension or ISA - which should you choose? I often get comments about how pensions are great while you're putting money in, but less great when taking money out, and that surely ISAs are better in the long run. Pension vs ISA - it's a grudge match that needs settling once and for all...

🏷️ Use PROMO Code "YOUTUBE" to save on any of the three courses.

If you do not get your free share after depositing £1. Use promo code MM212, you will find it in the section with the three lines in the bottom right corner of the app.

Chapters:
00:00 Intro
00:32 Welcome
01:18 Setting the scene
02:38 Example 1
04:48 Example 2
06:42 Example 3
07:51 Example 4
08:29 Summary
09:21 The actual outcome

The MeaningfulMoney Community (Facebook):

FOLLOW ME:

⚠️ IMPORTANT: Please be aware that MeaningfulMoney does NOT endorse or recommend ANY people or businesses claiming to be experts in crypto or other investments. We would never recommend you any investment strategies within the comments section. Please protect yourself against spam and misleading information from fake accounts and please do not share any private or sensitive information.

📫 Leave me a comment below - I read all of them and love hearing from you!
Leave me a comment below - I read all of them and love hearing from you!

[NicholasBall]

I admire your dedication to educating your audience. We all aim for financial stability and a better life. Achieving this is possible through wise investments, frugal living, and careful budgeting. I'm grateful that I learned the importance of working hard for financial freedom at a young age.

[Fatihu-nq]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[UbiquitousBooks]

I'm not sure if it's possible, but a really useful video would be about how to balance pension and ISA contributions if you want to retire before the age at which you can draw from your pension (which I think is increasing to 57, and probably further before I get there...). It seems stupid to have £1m banked but not be able to retired because its locked in a pension you can't access yet.

[iainbudge]

My fear is that the more you are sensible and take advantage of current tax efficencies etc - a future government will just raid the pensions and ISA's of the people who were more forward thinking and went without in the short to medium term. There is already murmurings of mansion taxes for property over a notional value, so a tax on people who for years put everything they had into their home perhaps investing a lot of time and what money they had to improve it at the expense of new cars, holidays etc.

[David-nmyc]

I'm 40 this year, I have just finished paying off my mortgage. This would not of been possible with a pension. My ISA is giving me freedom and choices. I have also avoided any higher interest rates with the mortgage.

[francoflyline]

This s true from a tax planning point. However one very big advantage of ISA is time. You dont have to wait until you are 55 to start drawing monies. You can draw at any point, just in case you need it

[johndoyle]

Sound advice, when I was at peak earnings, mortgage paid off, kids left home, I paid a huge amount of my salary into a sipp, and in those days saved 40% tax on the way in, and now draw out at 20%. I was also lucky enough to also save into Peps, (remember them), and ISAs.
Result, I retired at 55.
Yes, I was lucky, I was a high earner, but knew it could not last, it was killing me mentally, but I had the option now to retire.

Thanks for the video.

[sheraziqbal]

Most people including me don't realise the important of pensions and saving for retirement in our twenties. Can you do a video advising people who need to start saving at 40 and what kind of pension pots they can expect.

[BobBob-uvfq]

Best thing I did was do nine years in the raf, even though it’s not a huge pension, it will make such a difference to my life

[waynesmyth]

The one big advantage with an ISA is you can access it before you retire.

So if you have unexpected bills, it's a useful pot of money to dip into.

[sangetube]

Could you make a video about late to start retirement options and strategies please? For people that haven't given it much thought until they're in their 30s 40s 50s please?

[pataleno]

Hoping to retire in 10 years at 62 so maxing out my ISA and paying into 2 pensions.
My wife will be very well off if I go before then. 😢

[francoflyline]

Also time horizon s very important. For someone who were born in the 50 to 70, their retirement age was fairly low and so can still enjoy a lot of the pension when they retire. Sadly the life expentency doesnt move as fast as the rise in pension age - we barely live until our 80 or 90 in best case scenario these days, so having the abiliyy to draw things out earlier from an isa becomes more important

[johnathansteve]

What a great video, I love everything you said, it always makes me wonder what it would be like if we had not established financial systems all over Europe

[cosminooful]

I have to say I am really young and just starting my career and found all the pension stuff overwhelming but you are a god sent with how easily you are explaining it. Thank you so much for sharing your valuable knowledge

[rav]

UK government in all likelihood will raid pensions after starting wars abroad. So I'm prioritising ISA deposits and only paying in workplace pension.

[pja]

Best thing about the ISA is I can access it anytime I need it. I don't need to wait until the government says I can.

[PKSiAMiAM]

Thanks so much for this!!! I've been so massively stressed trying to understand the best way to save for retirement. This has been the first video based in the uk that's actually explained pro's and cons. So thankful for this.

[OurTourBlogVideos]

Yep, we got this wrong, thanks so much for the video Pete - you may well have saved us a ton of £££ (and our estates - we'd no idea SIPPs weren't in the IHT calculation). You're a hero, keep up the fantastic work. Jay

[MacroLensMan]

The thing is, it depends what the pension is invested in.

Company pensions by default are usually invested in some ridiculously low return mix of bonds and bad equity funds... usually to try and reduce volatility in the short term (pointless).

Whereas if you just simply buy the S&P 500 index fund from blackrock or Vanguard the trailing 10 year average return is 14% (as of 2024).

My solution has always been to change my pension immediately in any company i work for to "Freestyle" or "Custom" and basically invested it in a fashion to mirror what i do in my ISA.

I even bought Nvidia in 2007 in my BA pension where i had complete control 😂.