Often both, and the order matters more than the choice. Pensions give tax relief going in but lock the money away until at least 55. ISAs are reachable at any time and tax-free coming out.
Both shelter growth from UK income tax and capital gains tax. What separates them is when the tax relief lands and when you can get at the money.
2026/27 allowances. Limits and tax treatment depend on your circumstances and change at Budgets.
Contribute enough to get every pound your employer will match. Nothing else available pays that.
Anything you may need within five years does not belong in a pension, and arguably does not belong in the market at all.
If you pay 40% or 45% tax now and expect to pay basic rate in retirement, pension relief is worth more to you than ISA flexibility.
Having money in both gives you a choice of which to draw from later, and that choice is itself worth something in tax.
Yes. The allowances are separate and using one does not affect the other.
You can still pay into a pension and get tax relief, up to a modest annual amount, even with no earned income at all. An ISA has no earnings requirement.
Yes, and usually towards having some of both, so you can choose which pot to draw from each year and keep your taxable income inside a lower band.
It uses the same £20,000 allowance. For money you may need soon that is the right home for it; for money meant to grow over decades, cash has historically struggled against inflation.
Which allowance to fill first depends on your tax position now, your likely position in retirement, and when you might need the money. It is worth working through with somebody.
Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write. We will tell you honestly whether we can help.