According to Which? Magazine, pensions are better than Individual Savings Accounts when saving for retirement because of the additional tax benefits. Based on their figures, £100 invested each month from age 40 should produce a fund of around £86,000 at age 65.
An index tracking ISA could produce £73,000 and an actively managed ISA could produce £60,000. Obviously, certain assumptions have been made by Which? when reaching the figures.
However, it is important to take advice when deciding on pensions or ISAs or a combination of both. For more on pensions visit the Pensions Adviser.com. For more on ISAs visit our Guide - Choosing an ISA in the Savings Adviser.com.