Stuart Meiklejohn compares pensions and ISAs to see which is the most effective retirement planning tool
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...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes