Holly Mckay
Holly MackayFounder and CEO
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    • Home • Advice • Common questions

    Which is better for me an ISA or a Pension?

    28 July 2021

    Question by Sarah

    I have a lump sum of money. Is it better to put it into an ISA or into a pension? I am 47 years old

    Answered by Boring Money

    Hi Sarah

    Without knowing how much money you have, or what you want to it to do for you it’s very difficult to say either way. Both ISAs and Pensions can be very useful vehicles for savings, however Pensions can only be accessed after the age of 55 (currently, - set to rise to 57), so if you want to use the money before then you’ll have to use an ISA. If you have more than £20,000 then you’ll have more than your available ISA allowance for this year and may have to use different tax wrappers to invest your money. Most modern ISAs and Pensions give you access to the same underlying investments, so choice of what you invest in should be the same across both. The main difference will be the tax treatment on contributions, growth and then accessing the money in the future. I’d recommend you speak to an independent financial adviser who’ll be able to ask you some helpful questions and then help you with your choice.

    Kind regards

    Answered by

    Boring Money

    Here to help you understand your options and make smart money choices.

    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
    Risk warningAs is always the case with investing, your capital is at risk. The value of your portfolio can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may change in the future.
    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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