Pensions vs ISAs

When basic rate tax reduces from 22% to 20%, pensions may no longer be the best way for basic rate taxpayers to save towards retirement - so claimed a recent article in the national press. Intrigued by this notion, I decided to take a look at the numbers. Despite the newspaper's claims, I found that in terms of investment growth, pensions still have a significant advantage when saving for retirement - even for basic rate tax payers. The maximum for ISAs is currently £7,000 pa, so this was the net contribution and income figure I used for both pensions and ISAs. I based the comparison on...