SIPP vs ISA - 40pc tax but no beneficiaries (ie kids)

[413x]

Wondering if anyone is in this position.
Must be a fair few.

With end of tax year coming up, and being in the 40pc band now I'm reviewing and thinking of a sipp for the first time.
I don't need explaining about tax implications of both. I know what to do, how relief works and having to do a self assessment etc.
Obviously I already make use of my work place pension.

One thing I don't understand about pensions is how much is left over when you die.
Ie, how does the pot dwindle over your retirement?

This usually isn't important when you have beneficiaries/kids to pass stuff on. But what happens if you don't?

I'm assuming SIPP still wins out as 40pc is a lot of saving vs an ISA.


Is there any reason at all to contribute to an ISA vs a SIPP in this situation?

 

[413x]

You need to speak to an IFA to dig into this further.

The delta between the two is accessibility and point of tax.

SIPP = Pay in money, get 20% relief and claim the rest back in a self-assessment, tax-free growth, but the money is locked until retirement or face stiff penalties to access it early. Then you can take up to 25% cash-free and either draw down or purchase an annuity. If you draw down you can leave what's left in your will (under certain circumstances)
ISA = Pay in money, no tax relief, but tax-free growth and you can access the money whenever you like.

It's not like for like, a or b, it's more what are you trying to achieve.

Yeah I know all that.

What I don't know is how pensions work whilst drawing down.

Here's an extreme.. if you know you're gonna pop it, but get warning.. You can literally take everything out of an isa and blow it all.

I have no idea how pension drawdown works.
Do you have 75pc left (after tax free lump sum)
Then it's drops over time? For example are you left with 50pc of your pot at 80? I have no idea on this.

I believe (from a bit of reading) if you have a terminal disease you can only get your money from pension 6 months left to live? That's grim.