What is the annual ISA allowance?

The 2026/27 ISA allowance is £20,000 per person. Growth and withdrawals are completely tax-free. Stocks and shares ISAs are best suited to long-term investing due to market volatility.

How does pension tax relief work?

For every £80 you contribute as a basic-rate taxpayer, the government adds £20 in tax relief, making it £100 invested. Higher-rate taxpayers can claim an additional 20% through self-assessment.

Which is better — ISA or pension?

Pensions offer tax relief on contributions and employer matching but lock in money until age 55 (57 from 2028). ISAs are more flexible — no tax on growth or withdrawal, and you can access funds any time.

Tax-Efficient Investment Tool

Compare the growth of investments inside a tax wrapper (ISA or pension) versus a general investment account. See the tax saving and how it compounds over time.

How it's calculated

Future Value = Annual Investment × ((1+r)^n − 1) ÷ r
ISA Tax Saving = CGT that would have been paid on growth
Pension Relief = Contributions × Marginal Tax Rate

Frequently Asked Questions

What is the annual ISA allowance?: The 2026/27 ISA allowance is £20,000 per person. Growth and withdrawals are completely tax-free. Stocks and shares ISAs are best suited to long-term investing due to market volatility.
How does pension tax relief work?: For every £80 you contribute as a basic-rate taxpayer, the government adds £20 in tax relief, making it £100 invested. Higher-rate taxpayers can claim an additional 20% through self-assessment.
Which is better — ISA or pension?: Pensions offer tax relief on contributions and employer matching but lock in money until age 55 (57 from 2028). ISAs are more flexible — no tax on growth or withdrawal, and you can access funds any time.