Should I get a workplace pension or an ISA?
08 July 2024
Question by Kris
Hi,
My wife has not long started a new job and has been asked if she wants to join the company pension scheme. Combined contributions are about £75 a month. I was thinking, would a Stocks & Shares ISA be better (£100 a month for about 10 or 11 years)? She has a pension from her previous employer.
Thanks.
Answered by Tanya Laing
As a general rule, joining a workplace pension is usually a good idea. Not only will your wife enjoy tax relief from the government, but she will also benefit from additional contributions from her employer of at least 3%. That’s free money on top of her normal salary.
The downside of course is she will have to wait until she is 55 (rising to 57 from 6 April 2028.) to access it. Your wife could also move her pension from her previous employer to her current employer pension for ease of administration.
ISAs, on the other hand, offer a tax benefit in the form of tax-free growth, so it is good they are on your radar. They have the added advantage (or disadvantage!) that they are readily accessible.
It is also worth your wife considering contributing to both ISAs and pensions running at the same time. It doesn’t have to be much, every little bit counts.
So as is often the case with personal finances – there is no right answer to your question! That’s because whether it’s better for your wife to put money into an ISA or a pension really depends on where she is at financially and what her financial objectives are.
But what is not in doubt is that ISAs and pensions are both tax-efficient ways of saving or investing. And the longer you can save into both of them, the better!
Answered by

Tanya Laing
Chartered Financial Planner
I want to get people talking more comfortably and openly about money. Debunking that thought that ‘I don’t understand finance’ is my passion. I enjoy talking to people and understanding their story - because it is this individual story that is the foundation of financial advice. Oh, and also – no jargon. Just a friendly, collaborative approach to give more confidence, clarity and peace of mind to your personal finances.