\n<\/p>\n
S<\/span>hould you invest in a pension or an ISA? Is there a decisive answer to the eternal SIPPs vs ISAs question?<\/p>\n Well\u2026 almost. <\/span>We can make a few immediate statements that provide clear direction \u2013 although the decision tree gets pretty thorny after that:<\/span><\/p>\n Otherwise, much depends upon if you\u2019re contributing to your SIPP (or other pension type) at the higher-rate of income tax or at the basic rate:<\/p>\n The Kong-sized caveat to all this is that future changes to the tax system may move the SIPP vs ISA goalposts.<\/p>\n Tax-strategy diversification<\/em> can help you address the uncertainty.\u00a0It involves you employing several different tax shelters, irrespective of their current pecking order.<\/p>\n Spreading your savings across various tax shelters is particularly sensible for young people for whom retirement is decades away. But the technique is worth everyone else considering too, because SIPPs and ISAs hedge against different tax risks. We\u2019ll talk about that in a sec.<\/p>\n To set the scene, let\u2019s first recap what ISAs and SIPPs have in common\u00a0\u2013 and what sets them apart.\u00a0<\/p>\n Terminology intermission: <\/strong>I mostly talk about SIPPs in this article but the conclusions apply equally well to other defined contribution (DC) pensions, such as Nest-style auto-enrolment Master Trust Pensions<\/a>. I\u2019ll use the term ISAs to refer to all ISA types, except for the LISA. I\u2019ll mention the LISA when its special features alter the SIPP vs ISA comparison.<\/p>\n SIPP or ISA? There\u2019s nothing between them on the following counts:<\/p>\n\n
\n
\n
\n
Goalposts on wheels<\/h3>\n
SIPPs vs ISAs: these things are the same<\/h2>\n