ISA vs SIPP vs GIA Calculator UK
Compare the three UK investment wrappers on what really matters — the after-tax money you walk away with — and see why a SIPP’s “free 25%” isn’t free, and an ISA isn’t always best.
An ISA, a SIPP, and a general investment account (GIA) can hold the exact same investments — the difference is entirely in the tax, and it changes the money you end up with by thousands. An ISA is paid from taxed income, grows tax-free, and comes out tax-free, with full access any time. A SIPP gets tax relief going in (a basic-rate saver’s £10,000 becomes £12,500), but it’s locked until 57 and 75% of it is taxed as income on the way out. A GIA has no limits at all, but you pay capital gains and dividend tax along the way. The SIPP’s headline “25% boost” looks like an ISA with free money on top — but tax on withdrawal means its real edge depends entirely on your tax rate now versus in retirement. This calculator compares all three on after-tax outcome, so you see which wrapper actually wins for your situation. To project the growth itself, use the Compound Interest Calculator; for the pension tax relief in detail, the Pension Tax Relief Calculator.
Investment amount
Tax position
GIA tax assumptions
Fees and limits
Investment wrapper result
Estimated best after-tax value
Calculating…
Calculating…
ISA after-tax value
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SIPP after-tax value
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GIA after-tax value
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SIPP tax relief added
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GIA tax estimate
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Total net contributions
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ISA vs SIPP vs GIA — quick lookup
The left table is the one that matters: the after-tax money you actually walk away with from £10,000 of take-home pay, invested for 20 years at 5% a year, under each wrapper and tax scenario. The right summarises the features that drive those numbers — limits, access, and where the tax falls. The outcome table is where the real decision lives.
| Wrapper / scenario | You keep |
|---|---|
| ISA | £26,533 |
| SIPP — 20% in, 20% out | £28,191 |
| SIPP — 40% in, 20% out | £37,588 |
| GIA | £24,097 |
| Feature | ISA | SIPP | GIA |
|---|---|---|---|
| Annual limit | £20k | £60k | None |
| Tax relief in | No | Yes | No |
| Tax-free growth | Yes | Yes | No |
| Access | Any time | Age 57+ | Any time |
| Tax out | None | 75% taxed | CGT/div |
Outcome table assumes £10,000 of take-home money, 20 years, 5% annual growth, and a basic-rate retirement. The SIPP figures reflect tax relief grossing up the contribution, then 25% tax-free and 75% taxed on withdrawal. The SIPP only pulls clearly ahead when you get relief at a higher rate than you pay in retirement — the “40% in, 20% out” row.
How each wrapper is taxed
Every tax decision about these three comes down to three moments: the money going in, the growth along the way, and the money coming out. Each wrapper taxes those moments differently, and that’s the whole story.
ISA — taxed once, on the way in
You fund an ISA from money you’ve already paid tax on. After that, nothing is taxed — no tax on growth, no tax on withdrawal, and full access whenever you want. The simplicity is the appeal: what you see is what you keep. The limit is £20,000 a year. For most people, most of the time, the ISA is the sensible default precisely because there’s no tax to model and no lock-in to regret.
SIPP — relief in, tax out
A SIPP works in reverse. Contributions get tax relief at your marginal rate, so a basic-rate saver’s £10,000 net becomes £12,500 gross (relief at 20%), and a higher-rate saver can reclaim more. Growth is tax-free. But you can’t touch it until 57, and on withdrawal only 25% is tax-free — the other 75% is taxed as income. So the SIPP isn’t an ISA with free money; it’s a bet that your tax rate in retirement is lower than the relief you got going in. When it is — higher-rate now, basic-rate later — it’s powerful. When it’s the same rate both ends, its only edge is the 25% tax-free lump sum.
GIA — no limits, but taxed as you go
A general investment account has no contribution limit and no access restriction — its entire reason to exist. The cost is tax: you pay capital gains tax on gains above the annual allowance when you sell, and dividend tax above the dividend allowance along the way. For most people the GIA is the overflow account — used once the ISA and SIPP allowances are full, because those wrappers are almost always more tax-efficient when you have room in them.
Worked examples
Four scenarios with the same £10,000 of take-home money over 20 years at 5%, showing how the wrapper — and your tax rate — changes what you keep.
Scenario 1 · ISA, basic-rate saver
Simple, flexible, tax-free
Grows to £26,533 · Tax on withdrawal: £0
You keep: £26,533
The baseline. £10,000 grows to £26,533 and every penny is yours, accessible at any age. No tax to calculate, no lock-in. For a basic-rate saver who values flexibility — or might need the money before 57 — the ISA is hard to beat, and is the right default unless a specific reason points elsewhere.
Scenario 2 · SIPP, same rate in and out
The TFLS edge, and nothing more
25% tax-free (£8,292) + 75% taxed @ 20%
You keep: £28,191 (vs ISA £26,533)
Here the saver gets 20% relief and pays 20% in retirement — the rates cancel. The SIPP still beats the ISA by £1,658, but only because of the 25% tax-free lump sum; the rest is a wash. This is the honest version of “free 25%”: when your tax rate doesn’t drop, the SIPP’s whole advantage is that quarter you take out tax-free, not the headline relief.
Scenario 3 · SIPP, higher-rate now, basic-rate later
Where the SIPP genuinely wins big
25% tax-free + 75% taxed @ 20% in retirement
You keep: £37,588 (vs ISA £26,533)
This is the SIPP’s killer case. A higher-rate taxpayer gets 40% relief going in but only pays 20% in retirement — pocketing the 20-point difference. The same £10,000 of take-home ends up £11,055 ahead of the ISA. The lesson: the SIPP isn’t about the wrapper, it’s about tax rate arbitrage — get relief high, pay tax low.
Scenario 4 · GIA, allowances used up
The overflow account’s tax drag
CGT on gain (less £3,000 allowance) @ 18%
You keep: £24,097
The GIA comes last for a reason. The same growth, but capital gains tax on the gain (and dividend tax along the way, not shown) leaves you with £24,097 — over £2,400 behind the ISA. The GIA only makes sense once you’ve filled your £20,000 ISA and £60,000 SIPP allowances. With room in those wrappers, the GIA is simply the most expensive way to hold the same investments.
Which wrapper wins — the decision in four questions
There’s no universal winner — the right wrapper depends on your answers to four questions, in order. Most guidance gives you a generic ranking; the truth is that the same person should use different wrappers for different money. Work through these and the answer becomes specific to you:
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1
Will you need the money before 57?
If yes, the SIPP is out — it’s locked until 57 (rising over time). An ISA is the only tax-sheltered option you can access any time, so near-term goals belong there regardless of tax rate.
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2
Will your tax rate be lower in retirement?
This is the SIPP question. A higher-rate taxpayer now who’ll be basic-rate in retirement gets relief at 40% and pays 20% — a large, structural win. If your rate stays the same, the SIPP’s edge is just the 25% lump sum.
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3
Have you filled your ISA and SIPP allowances?
£20,000 a year for the ISA, £60,000 for the SIPP. Only once both are full does the GIA earn its place — it’s the overflow, not a first choice, because its CGT and dividend tax make it the costliest wrapper for the same investments.
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4
How much do you value flexibility?
The ISA’s tax-free access is worth real money in optionality, even if a SIPP would technically beat it on paper. Locking money away to 57 is a genuine cost — weigh the extra return against losing access for decades.
£10k take-home, 20yr — the full ranking
Same money, very different outcomes by wrapper and rate:
The ranking flips entirely on your circumstances. For a higher-rate earner saving for retirement they won’t touch, the SIPP is £11,000 ahead — no contest. For someone who might need the money in ten years, the ISA wins by default because the SIPP isn’t even available to them. And the GIA, bottom of the table here, is the right answer the moment your other allowances are full. The honest framework most people land on: SIPP for higher-rate retirement money, ISA for everything flexible, GIA only when both are maxed. The same person uses all three for different pots.
The order most people should fund them
A common, sensible priority runs: first capture any employer pension match (free money, beats everything), then fill the ISA for flexible tax-free growth, add to a SIPP if you’re higher-rate and saving specifically for retirement, and use a GIA only once the ISA and SIPP allowances are exhausted. That order isn’t universal — a basic-rate saver determined to lock money away for retirement might favour the SIPP earlier for the 25% lump sum — but it’s the default that serves most people, and the calculator lets you test where your own numbers diverge from it.
Two scenarios that flip the answer
What if…
You’re higher-rate now but basic-rate at retirement?
What if…
You might need the money in 10 years?
Key investment wrapper terms explained
Comparing wrappers means meeting the language of tax relief, allowances, and withdrawals. The ten terms below cover what you’ll encounter choosing between an ISA, a SIPP, and a general investment account.
- ISA Individual Savings Account
- A wrapper funded from taxed income that grows and pays out completely tax-free, with full access any time. £20,000 a year limit. The simplest and most flexible tax shelter, and the sensible default for most savers.
- SIPP Self-Invested Personal Pension
- A pension wrapper that gives tax relief on contributions but locks money until 57, taxing 75% as income on withdrawal (25% is tax-free). Powerful when your tax rate falls in retirement.
- GIA General Investment Account
- An unwrapped account with no limits and no access restriction, but no tax shelter — you pay capital gains and dividend tax. Best used as the overflow once ISA and SIPP allowances are full.
- Tax relief
- The top-up a pension contribution receives at your marginal rate — a basic-rate saver’s £10,000 becomes £12,500, a higher-rate saver reclaims more. The SIPP’s headline benefit, but partly clawed back as tax on withdrawal.
- Tax-free lump sum TFLS / PCLS
- The 25% of a pension you can usually take tax-free from 57. It’s the part of a SIPP that beats an ISA even when your tax rate doesn’t change, since the other 75% is taxed as income.
- Capital gains tax CGT
- Tax on the profit when you sell an investment in a GIA, above a small annual allowance. ISAs and SIPPs are exempt from CGT entirely — a key reason they beat a GIA for the same holdings.
- Dividend tax
- Tax on dividends received in a GIA, above a small annual allowance, charged at the dividend rates. Like CGT, it doesn’t apply inside an ISA or SIPP, which is why unwrapped investing is the costliest option.
- Annual allowance
- The cap on tax-relieved pension contributions — generally £60,000 a year (or 100% of earnings if lower), separate from the £20,000 ISA limit. Exceeding it can trigger a tax charge, so high earners watch it closely.
- Marginal rate
- The rate of Income Tax on your next pound of income — basic (20%), higher (40%), or additional (45%). It sets both your pension relief going in and the tax on SIPP withdrawals, which is why the gap between the two decides the SIPP’s value.
- Employer match
- Pension contributions your employer adds when you pay in, often pound-for-pound up to a limit. Free money that beats every wrapper here — capture the full match before funding an ISA, SIPP, or GIA of your own.
Five mistakes people make choosing a wrapper
Wrapper choice is full of half-truths that cost money. These five errors, drawn from the recurring r/UKPersonalFinance and r/FIREUK threads, are how savers pick the wrong shelter or misjudge the one they’ve chosen.
Treating SIPP relief as free money
The 25% boost looks like an ISA with a bonus, but 75% of a SIPP is taxed as income on withdrawal. If your tax rate is the same in retirement, the SIPP’s only real edge over an ISA is the 25% tax-free lump sum. The relief isn’t free — it’s deferred tax, and the benefit depends on your rate falling later.
Cost: over-funding a SIPP expecting “free” returns Fix: compare your tax rate now vs in retirementLocking money in a SIPP you’ll need sooner
A SIPP can’t be touched until 57 (and rising). Savers chasing the tax relief sometimes lock away money they need for a house, a career break, or an emergency — then can’t reach it. If there’s any chance you’ll need the cash before retirement, it belongs in an ISA, whatever the SIPP’s tax advantage looks like on paper.
Cost: money trapped until 57 when you need it sooner Fix: use an ISA for any pre-retirement goalUsing a GIA before filling tax-free allowances
A GIA pays CGT and dividend tax that an ISA and SIPP avoid entirely. Investing in a GIA while you still have £20,000 of ISA or £60,000 of SIPP allowance unused means paying tax you didn’t have to. The GIA is the overflow account — fill the sheltered wrappers first, every time.
Cost: needless CGT and dividend tax Fix: fill ISA and SIPP allowances before a GIASkipping the employer pension match
Many savers pour money into an ISA or SIPP while leaving an employer pension match on the table. A match is an instant, guaranteed return — often 100% — that beats every wrapper compared here. Capture the full employer match first, then decide between ISA, SIPP, and GIA for the rest.
Cost: turning down a free 100% return Fix: max the employer match before anything elsePicking one wrapper for everything
The wrappers aren’t rivals — they suit different money. The right answer is usually to use all three for different pots: a SIPP for higher-rate retirement saving, an ISA for flexible medium-term money, a GIA once both are full. Forcing a single choice for every goal leaves tax efficiency or flexibility on the table.
Cost: lost efficiency from a one-size choice Fix: match each wrapper to each goalFrequently asked questions
ISA or SIPP — which is better?
Neither is universally better — it depends on your tax rate and when you need the money. A SIPP wins when you get tax relief at a higher rate than you’ll pay in retirement (for example 40% relief now, 20% tax later), where it can beat an ISA by over £11,000 on £10,000 invested.
An ISA wins when you might need the money before 57, or when your tax rate won’t fall in retirement — then the SIPP’s only edge is its 25% tax-free lump sum. Most people use both: a SIPP for higher-rate retirement saving, an ISA for flexible money.
Why isn’t a SIPP’s 25% tax relief “free money”?
Because 75% of a SIPP is taxed as income when you withdraw it. The 25% relief going in looks like a bonus, but it’s largely deferred tax — you’re taxed later instead of now. Only the 25% tax-free lump sum is genuinely untaxed.
The relief is real money only if your tax rate is lower in retirement than when you contributed. If you get 40% relief and pay 20% later, you keep the 20-point difference — that’s the win. If your rate is the same both ends, the SIPP only beats an ISA by the value of the tax-free lump sum.
When should I use a GIA instead of an ISA or SIPP?
Only once you’ve filled your ISA (£20,000) and SIPP (£60,000) allowances. A GIA has no contribution limit, so it’s the overflow for money beyond those shelters. But it pays capital gains tax and dividend tax that an ISA and SIPP avoid entirely.
For the same investments, a GIA is the most expensive wrapper — in our example it ends over £2,400 behind an ISA. There’s almost never a reason to use a GIA while you still have room in your tax-free allowances.
How much can I pay into each one a year?
An ISA has a £20,000 annual allowance. A SIPP has an annual allowance of £60,000 (or 100% of your earnings if lower), covering all pension contributions including any from an employer. A GIA has no limit at all.
The ISA and SIPP allowances are separate, so you can use both in the same year. Exceeding the pension annual allowance can trigger a tax charge, so higher earners — who may also face a tapered allowance — should check their position carefully.
Can I access a SIPP before 57?
No — a SIPP is locked until the normal minimum pension age, currently 55 and rising to 57, with limited exceptions such as serious ill health. This lock-in is the SIPP’s main drawback compared with an ISA.
If there’s any realistic chance you’ll need the money before then — for a house, a career break, or an emergency — it belongs in an ISA, which you can access at any time. The SIPP’s tax advantage is worthless if you can’t reach the money when you need it.
Do ISAs and SIPPs pay capital gains tax?
No. Investments inside an ISA or SIPP are completely free of capital gains tax and dividend tax, however much they grow or pay out. This is a major part of their advantage over a GIA, where both taxes apply.
It also means you never need to track gains or report them for investments in these wrappers — another practical benefit. In a GIA, by contrast, you must monitor gains against the annual CGT allowance and dividends against the dividend allowance, and report and pay tax above them.
Should I prioritise my workplace pension over a SIPP?
Usually yes, at least up to the employer match. An employer pension match is free money — often a pound-for-pound top-up — that beats every wrapper compared here. Capture the full match before funding a SIPP, ISA, or GIA of your own.
Beyond the match, a SIPP and a workplace pension work similarly on tax; the choice often comes down to investment options and fees. A SIPP typically offers wider investment choice, while a workplace scheme may have lower charges. Both share the same lock-in to 57.
What order should I fund these accounts?
A common, sensible order: first capture any employer pension match, then fill an ISA for flexible tax-free growth, add to a SIPP if you’re higher-rate and saving for retirement, and use a GIA only once both allowances are full.
This isn’t universal — a basic-rate saver set on locking money away for retirement might favour the SIPP earlier for the lump sum. The calculator lets you test where your own numbers diverge from the default. For tailored advice, consider a regulated financial adviser; free guidance is at MoneyHelper.
Related calculators
Wrapper choice connects to the growth projection, the pension relief, and the tax that makes each shelter worthwhile. These calculators handle each piece.
Methodology & sources
How the maths works
All three wrappers are compared on the same basis: an equal amount of take-home (post-tax) money, invested for the same period at the same growth rate, then valued after any tax on withdrawal. For the ISA, the contribution grows tax-free and is withdrawn tax-free. For the SIPP, the contribution is grossed up by tax relief at the marginal rate (net divided by one minus the relief rate), grows tax-free, then 25% is taken tax-free and 75% taxed at the assumed retirement rate. For the GIA, the contribution grows and capital gains tax is applied to the gain above the annual allowance on withdrawal. This equal-take-home approach is what makes the comparison fair, since the SIPP’s relief means the same take-home buys a larger gross contribution.
These are illustrative comparisons to show how the wrappers behave, not forecasts. Real outcomes depend on actual growth, fees, your precise tax rates in and out, dividend income, and how and when you withdraw. The aim is to reveal the structural trade-offs — relief versus tax-on-exit, flexibility versus lock-in — rather than predict a return.
Assumptions and conventions used
- Equal take-home: the same post-tax amount funds each wrapper
- ISA: tax-free growth, tax-free withdrawal
- SIPP: contribution grossed up by relief; 25% tax-free, 75% taxed on exit
- GIA: CGT on gains above the annual allowance; dividend tax along the way
- ISA allowance £20,000; SIPP annual allowance £60,000; GIA unlimited
- Access: ISA and GIA any time; SIPP from age 57
- Growth and tax rates shown are illustrative, not guaranteed
Primary sources
Frequently asked questions
ISA or SIPP — which is better?
Neither is universally better — it depends on your tax rate and when you need the money. A SIPP wins when you get tax relief at a higher rate than you’ll pay in retirement (for example 40% relief now, 20% tax later), where it can beat an ISA by over £11,000 on £10,000 invested.
An ISA wins when you might need the money before 57, or when your tax rate won’t fall in retirement — then the SIPP’s only edge is its 25% tax-free lump sum. Most people use both: a SIPP for higher-rate retirement saving, an ISA for flexible money.
Why isn’t a SIPP’s 25% tax relief “free money”?
Because 75% of a SIPP is taxed as income when you withdraw it. The 25% relief going in looks like a bonus, but it’s largely deferred tax — you’re taxed later instead of now. Only the 25% tax-free lump sum is genuinely untaxed.
The relief is real money only if your tax rate is lower in retirement than when you contributed. If you get 40% relief and pay 20% later, you keep the 20-point difference — that’s the win. If your rate is the same both ends, the SIPP only beats an ISA by the value of the tax-free lump sum.
When should I use a GIA instead of an ISA or SIPP?
Only once you’ve filled your ISA (£20,000) and SIPP (£60,000) allowances. A GIA has no contribution limit, so it’s the overflow for money beyond those shelters. But it pays capital gains tax and dividend tax that an ISA and SIPP avoid entirely.
For the same investments, a GIA is the most expensive wrapper — in our example it ends over £2,400 behind an ISA. There’s almost never a reason to use a GIA while you still have room in your tax-free allowances.
How much can I pay into each one a year?
An ISA has a £20,000 annual allowance. A SIPP has an annual allowance of £60,000 (or 100% of your earnings if lower), covering all pension contributions including any from an employer. A GIA has no limit at all.
The ISA and SIPP allowances are separate, so you can use both in the same year. Exceeding the pension annual allowance can trigger a tax charge, so higher earners — who may also face a tapered allowance — should check their position carefully.
Can I access a SIPP before 57?
No — a SIPP is locked until the normal minimum pension age, currently 55 and rising to 57, with limited exceptions such as serious ill health. This lock-in is the SIPP’s main drawback compared with an ISA.
If there’s any realistic chance you’ll need the money before then — for a house, a career break, or an emergency — it belongs in an ISA, which you can access at any time. The SIPP’s tax advantage is worthless if you can’t reach the money when you need it.
Do ISAs and SIPPs pay capital gains tax?
No. Investments inside an ISA or SIPP are completely free of capital gains tax and dividend tax, however much they grow or pay out. This is a major part of their advantage over a GIA, where both taxes apply.
It also means you never need to track gains or report them for investments in these wrappers — another practical benefit. In a GIA, by contrast, you must monitor gains against the annual CGT allowance and dividends against the dividend allowance, and report and pay tax above them.
Should I prioritise my workplace pension over a SIPP?
Usually yes, at least up to the employer match. An employer pension match is free money — often a pound-for-pound top-up — that beats every wrapper compared here. Capture the full match before funding a SIPP, ISA, or GIA of your own.
Beyond the match, a SIPP and a workplace pension work similarly on tax; the choice often comes down to investment options and fees. A SIPP typically offers wider investment choice, while a workplace scheme may have lower charges. Both share the same lock-in to 57.
What order should I fund these accounts?
A common, sensible order: first capture any employer pension match, then fill an ISA for flexible tax-free growth, add to a SIPP if you’re higher-rate and saving for retirement, and use a GIA only once both allowances are full.
This isn’t universal — a basic-rate saver set on locking money away for retirement might favour the SIPP earlier for the lump sum. The calculator lets you test where your own numbers diverge from the default. For tailored advice, consider a regulated financial adviser; free guidance is at MoneyHelper.
Related calculators
Wrapper choice connects to the growth projection, the pension relief, and the tax that makes each shelter worthwhile. These calculators handle each piece.
Methodology & sources
How the maths works
All three wrappers are compared on the same basis: an equal amount of take-home (post-tax) money, invested for the same period at the same growth rate, then valued after any tax on withdrawal. For the ISA, the contribution grows tax-free and is withdrawn tax-free. For the SIPP, the contribution is grossed up by tax relief at the marginal rate (net divided by one minus the relief rate), grows tax-free, then 25% is taken tax-free and 75% taxed at the assumed retirement rate. For the GIA, the contribution grows and capital gains tax is applied to the gain above the annual allowance on withdrawal. This equal-take-home approach is what makes the comparison fair, since the SIPP’s relief means the same take-home buys a larger gross contribution.
These are illustrative comparisons to show how the wrappers behave, not forecasts. Real outcomes depend on actual growth, fees, your precise tax rates in and out, dividend income, and how and when you withdraw. The aim is to reveal the structural trade-offs — relief versus tax-on-exit, flexibility versus lock-in — rather than predict a return.
Assumptions and conventions used
- Equal take-home: the same post-tax amount funds each wrapper
- ISA: tax-free growth, tax-free withdrawal
- SIPP: contribution grossed up by relief; 25% tax-free, 75% taxed on exit
- GIA: CGT on gains above the annual allowance; dividend tax along the way
- ISA allowance £20,000; SIPP annual allowance £60,000; GIA unlimited
- Access: ISA and GIA any time; SIPP from age 57
- Growth and tax rates shown are illustrative, not guaranteed