Why did we choose ISA access over more pension?

Where should the newly visible money go?

Once the spreadsheets exposed several thousand pounds a month of saving capacity, we had the next question: pension, ISA — or some combination? A nice problem to have, admittedly, but still a decision.

The spreadsheets could compare tax treatment and projected growth. They could not decide how much we should value access before retirement.

The pension result looked stronger

We modelled doubling my employee pension contribution from 6% to 12%. Salary sacrifice made the pension route look more efficient than putting the same take-home money into an ISA.

If the only objective had been maximising the retirement pot under those assumptions, the pension had a strong case. Fortunately, “largest possible number” was not our only objective.

The risk the spreadsheet did not price neatly

We were still around eight and a half years from the planned retirement date. Pension money was committed to retirement. ISA money could still fund retirement, but it remained available if work, health, family or the plan itself changed.

That access was not an excuse to spend it. It was a buffer against needing to dismantle the wider plan when life did something inconvenient.

Our choice

Keep my employee pension contribution at 6%, taking the full employer contribution available to us, and direct most of the additional saving capacity into ISAs once the mortgage is gone.

We knowingly gave up some modelled tax efficiency to buy flexibility and security. That is not universally optimal. It is the trade-off we preferred for the years between now and 2035.

What would make us revisit it

A change in tax rules, employment security, ISA limits, mortgage progress or our retirement date could alter the balance. This decision is deliberately reviewable. The point was not to declare ISAs better than pensions; it was to give each pot a job.