Saving for retirement: ISAs vs. SIPPs

SIPPs offer more generous tax breaks overall, but ISAs are more flexible. So, which is better for your retirement?

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For many investors, the choice between using an individual savings account (ISA) or a self-invested personal pension (SIPP) to save for retirement has always been a tough one.

With the cost of a comfortable retirement hitting £43,100 per year, according to the Pensions and Lifetime Savings Association (PLSA), it may be tempting to focus on your pension so you can fund your golden years.

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Header Cell - Column 0 £60,000 salary with a pension£60,000 salary with an ISA
Starting monthly contribution£250£150
Investment wealth after 40 years£593,957£356,396
Potential yearly income£20,195£14,256
Marc Shoffman
Contributing editor

Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and the i newspaper. He also co-presents the In For A Penny financial planning podcast.