The ISA Vs. Your Pensions, Which Should You Get?

I’ve been thinking a lot about how a higher-rate taxpayer like me often gets the short-end of the stick. I’ve been investing on Cash Isas to ensure my pensions would go to my children and wife without much trouble, but then again I am faced with the dilemma after the UK government has decided to abolish the death tax overall.

Death tax is when the government gets a large cut over our pensions, a very big problem because we want our inheritors to actually get the entire pension benefits for themselves. The abolition of the death tax is a relief because it guarantees a 25% tax-free lump sum without any reductions to the pensions upon death.

Now that I’ve invested in a Cash Isa, I would consider having a pension now because now, I could withdraw before I reach 55 years old without any reductions. For Cash Isas, I would be getting tax free savings below £15,000. For pensions, I get everything tax free too.

It’s pretty hard to decide, but whichever works for me is the pensions because I can wait until I’m 55. For my Isa, as long as the Inheritance Tax does not interfere with the amount I save, I would definitely stay with it.