Figures checked on 24 September 2026
A SIPP — a self-invested personal pension — is a pension in which you choose the investments. What goes in gets tax relief: pay in £80 and the provider claims £20 from HMRC, so £100 is invested, and higher- and additional-rate taxpayers can claim more through Self Assessment. Relief applies to contributions up to your UK earnings for the year, or £3,600 gross if that's higher. The annual allowance — £60,000 for 2026/27, across all your pensions and including an employer's contributions — caps how much can go in with relief. It's lower for very high earners and for anyone who has started drawing flexibly from a pension.
The relief comes with a lock. Money in a SIPP can't normally come out before the pension access age: 55 now, rising to 57 on 6 April 2028. After that, a quarter can usually be taken tax-free and the rest is taxed as income when you draw it. An ISA works the other way round: money goes in from income that's already been taxed, gets no relief, and can come out at any age without tax. Inside both, dividends and gains aren't taxed, which is why the Tax Year widget leaves holdings marked ISA or pension out.
Mechanics only, not a comparison of outcomes. Allowances and ages change — check GOV.UK.
Educational content only. It is not personal financial advice.