Till now, I have been doing the bulk of my investing within my SIPP account with HL, with just a small amount in Stocks & Shares ISA Account. I am well over 55, so I am pondering the wisdom of taking some of my tax free portion from the SIPP (thus moving the necessary funds into drawdown account to accomplish this), and maxing out my ISA each year with these funds. As all these holdings are tax free - SIPP & ISA - except for withdrawals from the Drawdown eventually, I can't quite get my head around whether there is a benefit to growing the money in an ISA as opposed to just keep growing it in a SIPP, if I have no immediate plans to use any of it for income or retirement money, but will eventually. I am wondering if I am missing something here, and what the best strategy will be. I really appreciate any thoughts any of you may have on this - do you go towards ISA or SIPP as a preference - if you are near or past 55? Your thoughts on this much appreciated.
This subject has been discussed on some other web sites. Some examples are:
http://monevator.com/sipps-vs-isas-best-pension-vehicle/
https://www.sippclub.com/sipp-or-isa/
https://www.share.com/stocks-and-shares-isas-explained/isas-vs-sipps-which-would-you-choose/
I think the consensus of these articles is that SIPPs are now more tax advantageous than ISAs (although that depends on your individual circumstances), but ISAs are more flexible (particularly if you might want to extract a large amount of money in any one year).
However, if your SIPP portfolio is already big enough for its value after modest future growth to possibly exceed one million pounds by the time you're 75 years old, I think you might be better off investing in an ISA than a SIPP, because the tax charge at the age of 75 on SIPP portfolios over one million pounds seems to be punitive.