ISA vs Pension? Where to invest before the end of the financial tax year?

In February 9, 2016
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ISA vs Pension

Maximise your ISA allowance! The new financial tax year is almost upon us, which means you do not have long left.

I recently read an interesting article on the rising popularity of an ISA in favour of Pensions! Read here.

But for those of you, who don’t know, an ISA (Individual Savings Account) can be held in two forms: Cash or Equity (sometimes referred to as Stocks & Shares). ISA’s are a great tax efficient method of saving money that you could utilise, as the growth is completely tax free! Of course, with tax free growth, as you can imagine there are limits.

The current ISA allowance for this tax year is £15,240. And it is a use it or lose it situation! Unlike other investment vehicles, you cannot carry over your unused allowance to the new tax year. Although that would be nice!

If you have cash on deposit, that is gaining little or no growth, then chances are you are not even keeping pace with inflation. Meaning that the true value of your money is actually depreciating, with inflation eating away at it. If this is short term money on deposit, then you should consider holding the funds in a Cash ISA, assuming you have the allowance left to do so. You can use sites like  to search the market place for a competitive interest rate, to at least gain some growth on your money. The plus side of a Cash ISA, is they are not affected by what the markets are doing. The downside to a Cash ISA is you will never be able to target high levels of growth, the interest rate will drop off usually after a certain term and inflation may then eat into the value of your money over the long term.

If you have cash on deposit that you do not require for the short term, i.e. you wouldn’t need it for at least the next 5 years, then you may want to consider an Equity ISA. The advantages of an Equity ISA are that you can have an investment portfolio that is matched to your attitude to risk and you can potentially target greater growth than cash returns. The disadvantage is that in an Equity ISA, you would be invested in the markets. Therefore, if the markets are experiencing declines, then your ISA will fall in value. Therefore you should only consider investing in a true Equity ISA, after seeking professional financial advice.

If you have already utilised your ISA allowance for this tax year, there are many other investment options available that you could adopt. Either way, don’t let inflation win! Make your money work for you, not against you!


Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. Past performance is not a guide to future performance. Tax rules can change at any time.

Please remember your home or property may be repossessed if you do not keep up repayments on your mortgage.  We give clients the option to pay for mortgage advice by fee rather than commission. Equity Release refers to lifetime mortgages. To understand the features and risks, ask for a personalised illustration.

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto Enrolment, Tax Advice and Estate Planning.

The opinions contained within this blog, do not constitute financial advice and no action should be taken based on this content alone.


Jasmine has been a qualified Financial Planner since 2008. She has also been a member of the Society of Will Writers since 2012. She is passionate about helping Clients build their wealth and achieve the financial lifestyle they desire. Her areas of expertise are that of Savings, Investments, Pensions and Retirement Planning.

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The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto-Enrolment, Tax Advice and Estate Planning. Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.

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