ISA vs SIPP Calculator
Compare the same gross contribution going into an ISA versus a SIPP. After tax relief on the way in, growth, and tax on the way out, which wrapper actually wins for your situation?
Your numbers
Gross amount before any income tax. The same £ enters the SIPP via relief, or hits your ISA after you have paid tax on it.
Most people drop a band in retirement. State pension + small drawdown often puts you firmly in the 20% band.
After inflation. 5% is a common long-run assumption for global equities.
What happens to my data?
After-tax outcome at retirement
SIPP wins by £82,665
Over 20 years at 5% real returns, on a £10,000 gross annual contribution.
ISA
£198,396
Net annual contribution: £6,000
Withdraws tax-free.
SIPP
£281,061
Gross pot: £330,660
Tax-free lump: £82,665
Tax on withdrawal: £49,599
How the comparison works
- ISA path: you pay income tax now (at your current rate), then the net amount enters the ISA. Grows tax-free. Comes out tax-free.
- SIPP path: the full gross amount enters the SIPP via tax relief or salary sacrifice. Grows tax-free. On withdrawal: 25% tax-free, 75% taxed at your retirement marginal rate.
- When SIPP wins: if your retirement tax rate is lower than your current rate (the typical case for higher-rate earners going to a basic-rate pension).
- When ISA wins: if your retirement tax rate ends up higher than your current rate, or if you might need the money before age 57.
- Real returns: the result is in today's pounds. Use 5% as a sensible default for diversified global equities after inflation.