Pension vs Isa once my mortgage is paid off

[Deleted User]

Hi all, 

Just looking ahead a couple of years to when my mortgage is finished. In theory I will have about 1-1.5k per month to invest in either pension or ISA or a bit of both. So I will be massively making up for lost time on saving for old age.  Looking for advice please on how to split the cash. I'd like to balance the tax advantage of pension saving with the easier accessibility of the ISA. (Conscious of what happens if I get ill or something prior to the age when I can access pensions)
Thanks

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PROJECTED SITUATION
Age 45.  Single, no children. Good health.  Secure WFH job. Earning 45k pa.
Fairly modest lifestyle so won't be drawing down enough from pension to pay much income tax but have 2-3 "big" holidays on my bucket list. 
Flat worth 200k. (Owned outright as if a freehold (we don't do leaseholds in Scotland) 2nd floor and no lift so may need to move when I get elderly)
Cash savings 5k
Premium Bonds 5k 
Stocks & Shares ISA 40k 
Pension with current employer pot of 20k (bog standard SIPP type thing, they only do statutory minimum contributions)
SIPP 70k (my previous workplace pensions combined)

Doctor_Who

I would do both SIPP contribution and S&SISA. Depending on current pension contribution you may or may not be a higher rate tax payer (42% in Scotland), so I would check this first. If you do pay 42% income tax, then increasing pension contributions is a no-brainer!

Simon11

How much are you and employer currently putting into your pension? I would consider paying off the minimum on the mortgage now and focus on putting more into pensions which will leave you better off in the long run (assuming you are on a low mortgage rate). If paying the basic tax, you will save at least 20% of tax for money put into the pension.

What does your state pension look like?

german_keeper

With regard to the split between pension and ISA I would do some calculations regards future contributions and how much you are likely to have available in your pension at the age you are thinking of retiring. Then try and ensure you have at least enough to drawdown an amount equivalent to the Personal Tax Allowance every year. That then means that the return you will get from those contributions will be the full 25% tax relief you received on the way in. And of course fingers crossed for some decent investment growth. Anything above PTA will be taxed as income and the 25% figure reduces to 6.25%.

We did this with my wife's pension after the mortgage was paid and every month when she takes out the maximum she can, £1,256, it gives me a warm glow to see the nil tax figure.   

chockydavid1983

I'm not sure on the details but there are circumstances you can access your pension early if you have to retire due to ill health so you can probably focus mainly on pension contributions.
https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/early-retirement-because-of-illness-sickness-or-disability

MEM62

I would say that you are fairly well provisioned in your share ISA so I would only be making a modest monthly contribution to that.  You might want to increase your cash savings a little to give you better buffer.  Beyond that I would throw the rest of your spare at your pension as I think you have a little catching up to do there and the tax advantages make it extremely worthwhile.  

Albermarle

To generate a good/reasonable retirement income you need to build up a significant war chest, especially if you are planning to retire before state pension age. So it is good you are planning on putting more away.
Is there any chance you can increase your salary/boost your career before you get older ( tends to get more difficult then )?

[Deleted User]

Thanks everyone, this is all v helpful. 

To answer questions: 
1) No, I'm not a higher rate tax payer.  I took a step back down in my career at one point and am much happier. Spent a long time miserable but finally now found my groove. So unlikely to significantly increase my salary.  Would much rather cut outgoings both before and after retirement if I had to.
2) I've got a full NI stamp but God knows if there will be a state pension when I get to the relevant age.  I'm working on the basis of getting nothing. 
3) I suppose I might also want/need to retire early if I'm simply knackered as opposed to actually ill.  Therefore I do need to try and ensure I have enough in my S&S ISA. 
4) re the emergency funds, yes I plan to save 2 years outgoings in cash/NS&I before retiring.  So I don't need to drawdown in a stock market crash. As per Bogleheads type recommendation. 
5) My employer will only ever put in 4% of my salary to my pension. I put in 3%.  And I get basic relief at source. Chances are when I'm increasing my pension contributions, I will put them into my consolidated pension that I control myself. 
6) Good point about personal allowance.  Obviously the PA increases slightly every year but my v rough calculations indicate a pot greater than 375k would mean I would pay tax on drawdown of 4% per annum. 

Any further thoughts welcome!

[Deleted User]

I just so wish I had a crystal ball and knew when I would get tired/get ill/die and I could calculate backwards from there! So many variables to take into consideration.