Pension vs ISA Calculator
Compare pension and ISA outcomes for 2025/26. See how tax relief, employer match, salary sacrifice, and withdrawal tax affect your returns. Compare retirement income and find when flexible ISA access beats a locked pension.
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How to Use This Calculator
Side by Side tab
Enter your monthly contribution, current age, retirement age, current tax band, expected retirement tax band, and growth rate. The calculator shows your pension pot (with tax relief, employer match, and growth) versus your ISA pot (with growth only but fully tax-free on withdrawal). Both scenarios assume the same net monthly outlay from your pay. Expand "More options" to add employer match, salary sacrifice, State Pension, and inflation adjustment.
Retirement Income tab
See how much annual and monthly income each pot generates in retirement. The pension income is calculated after taking 25% tax-free cash (capped at £268,275) and taxing the remaining drawdown at your retirement tax rate. ISA income is fully tax-free. Set your drawdown period to see how long the money lasts and compare net income side by side.
Flexible Access tab
Enter your current age to see the access trade-off. The calculator shows an age-by-age timeline: ISA is accessible at every age, while pension is locked until 55 (rising to 57 from 2028). See exactly how much you would have in each pot at ages 40, 45, 50, 55, 57, 60, and 65 — and what happens if you need emergency access before pension age.
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The Formula
The comparison uses compound growth with different tax treatments:
Gross Contribution = Net Contribution / (1 − Tax Rate)
Tax Relief = Gross Contribution − Net Contribution
Total Monthly = Gross + Employer Match + Employer NI Saving (if salary sacrifice)
Pension Pot = FV(Total Monthly, Growth Rate, Years)
Tax-Free Lump Sum = min(25% × Pot, £268,275)
Net Pension = Pot − (Pot − Lump Sum) × Retirement Tax Rate
ISA:
ISA Pot = FV(Monthly Contribution, Growth Rate, Years)
Net ISA = ISA Pot (fully tax-free, no withdrawal tax)
Salary Sacrifice Bonus:
Employee NI Saving = Gross Contribution × 8%
Employer NI Saving = Gross Contribution × 15% (added to pension pot)
Future Value:
FV = Monthly × [((1 + r/12)^(12×N) − 1) / (r/12)]
where r = annual growth rate, N = years
Drawdown Income (annuity formula):
Monthly Income = Pot × (r/12) / (1 − (1 + r/12)^(−12×D))
where D = drawdown years
The pension benefits from tax relief (your contribution is grossed up), employer match (free money), and NI savings via salary sacrifice. The ISA benefits from zero tax on withdrawal and full flexibility to access funds at any age. The winner depends on your current vs retirement tax rate, employer match, and when you need access.
Example
Sarah — Marketing Manager, 35, Birmingham
Sarah earns £60,000 (40% higher-rate taxpayer). She has £500/month to invest and her employer matches pension contributions at 5%. She expects to be a basic-rate taxpayer (20%) in retirement at age 60.
Side by Side tab
Pension wins convincingly: Sarah gets 40% tax relief going in but only pays 20% coming out, plus 5% employer match. The pension pot is much larger due to grossing up and employer contributions.
Retirement Income tab
Even after paying 20% tax on pension drawdown, Sarah gets £5,627/year more from pension than ISA. Plus she received £132,308 tax-free cash upfront.
Flexible Access tab
If Sarah needs money at 50 for a career break, only the ISA is accessible. The pension pot is larger but completely locked until 57. The ideal strategy: pension up to the employer match, then ISA for flexible savings.