The perfect equation?

The ISA versus pension debate has been around for years and will most likely be around for many more. It has always tended to focus on which is best – a kind of ‘either/or’ analysis – but surely we are missing a trick when we compare the two, rather than debating how they complement each other. There are clearly advantages and disadvantages to each, but is it possible to get the best of both worlds? The tax position of ISAs and pensions is summarised in the box on the right. The 55% tax charge applies to lump sums paid on death at any age (whether before or after 75) after the pensi...