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?

pension pots
(Image credit: Getty Images/Mongkol Onnuan)

The cost of retiring is on the rise, making it more important to set money aside for your golden years in the most tax-efficient and effective way.

With the cost of a comfortable retirement hitting £43,900 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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£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.