Pension vs ISa

JPG82

Long story short is that we are both 30 and have 10years NHS pension each currently. We are hoping not to stay at work until SPA so started a stocks and shares isa last year paying £200 a month in.

The plan being that we use this isa to bridge the gap between retiring early and state pension.

Would we be better off saving this money in a pension opposed to the isa? Suppose we chose an isa so we had access to the money if needed earlier but am interested to if hear peoples views.

Would it make sense for example to start an additional private pension saving say £50 a month?

PeacefulWaters

Pension would give you tax relief and the opportunity to draw 25% as tax free income. If you're a 40% taxpayer and draw the income paying 20% tax there's another boost. The restriction on access, as you say, is age.

A disadvantage of the ISA comes when claiming means tested benefits. But it does give you much more flexibility at a younger age.

The plan being that we use this isa to bridge the gap between retiring early and state pension

This and the above nudges me more towards pension. Assume age 58 to be the earliest you can access pension funds.

atush

Why not both? Why not keep the ISA, reduce the monthly contribs and put the balance in a personal pension?


Use this money to live off before taking your NHS pensions esp if you decide to retire before scheme age.

jamesd

IF 40% income tax payer(s) use the pension. If basic rate start by using S&S ISA now. S&S first because you might be 40% later but also because at least one or two political parties are considering a 30% tax relief level for basic rate tax payers, so there may be an increase in benefit for basic rate tax payers within a few years, depending on election results.