When to Use an ISA, SIPP, or GIA
The decision tree for which UK tax wrapper to use, and in what order.
UK investors get three main account types — ISA, SIPP, and GIA. Each has different tax rules, contribution limits, and access ages. Most people should use them in a specific order to maximise after-tax returns.
The three wrappers, one paragraph each
ISA — Individual Savings Account
Funded with post-tax money, but everything inside grows tax-free and withdrawals are tax-free. £20,000 annual limit. Access at any age. The all-rounder. Read more in our ISA guide.
SIPP — Self-Invested Personal Pension
Funded with pre-tax money (via tax relief), grows tax-free, taxed on withdrawal. £60,000 annual limit (or 100% of salary, whichever is lower). Locked away until 57+ (rising to 58 in 2028). The retirement powerhouse. Read more in our SIPP guide.
GIA — General Investment Account
No wrapper. No limits. Pay dividend tax (0.5–39.35%) and capital gains tax (10–24%) on profits. The overflow account once ISA and SIPP are full.
The default order — for most people
1. Get full employer pension match first. If your employer matches up to 5%, contribute at least 5%. Free money beats every other tax wrapper.
2. Pay off high-interest debt. Credit cards at 25% APR beat any investment.
3. Build an emergency fund. 3–6 months of essentials in easy-access savings.
4. Fill your ISA. Up to £20k/year. Flexible, tax-free, accessible.
5. Top up the SIPP. Especially if higher-rate taxpayer — 40% relief is hard to beat.
6. Overflow to a GIA. When you've maxed both wrappers.
When to break the order
Higher earner (£100k–£125k income)
You're in the 60% personal allowance taper. £1 of pension contribution gets you 60p of tax relief. SIPP beats ISA dramatically. Pension first, ISA second.
Self-employed or contractor
SIPP via gross corporation tax deduction (if running through a Ltd) is often the most tax-efficient. ISAs still useful for accessible savings.
Under 40 with no house
Lifetime ISA (LISA) gives you a 25% government bonus on up to £4,000/year — for first home purchase or age 60+. Use it before standard ISA.
Already have a big pension
If your pension already comfortably covers retirement, prioritise ISA for tax-free flexibility before age 57.
Need money before age 57
ISAs only. SIPP is locked. GIA if ISA full.
Worked example — £40k earner, £500/month to invest
1. Workplace pension matched at 5% → £200/month from you (the match adds another £200)
2. ISA → £300/month
3. SIPP → only if you have spare and the ISA is full
Total going to investments: £700/month (your £500 + £200 employer match).
Crunch your own numbers with the SIPP relief calculator and ISA vs GIA calculator.
