AshleyW wrote:In general, as in the majority of cases, post-retirement income will be taxed at the same or lower tax rate as during the working life then the pension will win out even if you don´t receive an employer´s contribution due to the 25% cash tax-free and IHT benefits (but who knows whether these benefits will exist in 10-20 years time). Of course, the ISA does offer greater flexibility which could be important for house purchase, school fees, divorce, etc.
What concerns me is the inflexibility of NEST and Government schemes, as compared to using an ISA., and the potential for the Government to interfere or move the goal posts along the way (e.g. to postpone/change the earliest retirement date).
I like that the ISA can be accessed at any time, for either capital or income, whereas NEST cannot be touched until the retirement date is reached. Also, as already mentioned, whilst accepted one receives tax relief on the way into a NEST pension, the pension income is taxable when taken (subject to one's tax allowances and tax rates); whereas income (or capital) taken from the ISA is not subject to tax,(though accepted contributions are paid from taxed income and no tax relief is available on those).