Lloyd Hunt · age 24 to 65

The Forty Year Plan

A first house at 26, two children in the thirties, and stopping work somewhere between 60 and 65. Every figure here is in today's money, so inflation is already stripped out.

Starting pot £115,564 Contributing £15,000 a year Pot needed £1,456,155 S&P real return 6.9% State pension at 68

All of it into

The pension

Worth 1.3 to 1.8 times an ISA on the same company profit. The existing ISA balance is already the bridge.

£60,000 a year at age

50 to 55

Age 50 on the S&P's actual historic return, age 55 on a prudent five percent.

Pot at 60

£2.0m to £3.0m

Against the £1.46m needed. Working past 55 becomes a choice rather than a requirement.

Before anything else

The mortgage is not the constraint

On two years averaging £80,000 to £100,000 net profit, filed after August 2027, borrowing capacity clears what the house needs with room to spare. Contributing to the pension does not change that.

Scenario	Assessed income	At 4.5x	At 5x
No pension contribution	£102,570	£461,565	£512,850
After £20,000 into the pension	£82,570	£371,565	£412,850
What a £350,000 house needs at 10% down	—	£315,000	£315,000

Contribute the pension. Even at the pessimistic 4.5 times multiple, after a full £20,000 contribution, capacity sits £56,000 above what the house needs. Earlier advice on this page said hold off. On these profit figures it no longer applies.
Dividends never cost you borrowing power. They come out of post-tax profit, so they do not reduce the figure a lender assesses. Only pension contributions do.
Confirm the multiple. Four and a half times against five is £51,000 of capacity. Worth knowing which one the broker used before you plan around the headline.

The sequence

Five phases, each with a different job

Order matters. Each phase has one thing it is uniquely good at, and one thing that stops being possible once it ends.

2026 to 2028 · age 24 to 26

Deposit years

Everything points at the house. The Vanguard ISA de-risks in tranches into a money market fund, the LISA collects its second £1,000 bonus in April 2027, and the pension stays untouched so FY27 profit reads clean for a lender.

ISA £20,000 a year Pension nil Buy at 26

2028 to 2032 · age 26 to 30

The open window

Mortgage settled, no children, business at full margin. This is the highest surplus you will ever have relative to your commitments, and it lasts about four years. Money invested here compounds for thirty more. Every pound you skip now costs roughly four pounds at 60.

Contribute hardest here Pension unlocked Up to £50,000 a year

2032 to 2042 · age 30 to 40

Two children

A child costs about £250,000 to eighteen for a couple, including housing. Two overlapping means a peak of roughly £25,000 a year through the mid thirties. Contributions dip and that is fine, because phase two did the heavy lifting.

Two things become non-optional the moment a child exists. Life insurance and a will, and income protection, because Hunt Visuals stops earning the day you do.

Contributions dip Life cover and a will Income protection Two or three bed

2042 to 2052 · age 40 to 50

Crossing the line

School years, business mature, costs plateauing. On every track modelled, the £1,020,000 target is passed in this decade or before it. From here you are working because you want to, not because the sum requires it.

Target crossed Contributions recover

2052 to 2062 · age 50 to 60

Decide what it was all for

Children independent, mortgage most likely cleared around age 51. Pension access opens at 57 or 58. The last decade is about de-risking, moving out of pure equities as the date approaches, not accumulating more.

Pension opens at 57 to 58 State pension at 68 Stop when you choose

Where the money goes

All £15,000 into the pension

Both wrappers grow tax free. The difference is not what happens inside them, it is what the money goes through to get in.

The taxman takes his cut before an ISA and after a pension. Taking it after means the whole amount compounds for 36 years first.

Route one · through an ISA

Company profit you start with£31,764
Corporation tax takes 26.5%− £8,417
Dividend tax takes 35.75%− £8,347
Actually lands in the ISA£15,000
36 years at 6.5% real£144,770
Tax on the way out£0

You end up with£144,770

Route two · through the pension

Company profit you start with£31,764
Corporation tax£0
Dividend tax£0
Actually lands in the pension£31,764
36 years at 6.5% real£306,561
Tax on the way out, 25% free then 20%− £45,984

You end up with£260,577

£115,807 more Same money out of the business. Same fund. Same 36 years. The only difference is that the pension let all £31,764 start compounding instead of £15,000.

Why an ISA loses. It can only be filled with money that has already run the gauntlet. Corporation tax takes a quarter, then dividend tax takes another third, so less than half of what left the business ever reaches the account. Everything it earns after that is tax free, but it is earning on a much smaller pile.
Why a pension wins. A company pension contribution is a business expense, so it leaves the company before tax touches it. Twice as much money starts compounding on day one, and 36 years of growth on twice as much is roughly twice the result.
The tax does not disappear, it just waits. You pay income tax drawing a pension, but only on 75 percent of it, and only after it has already grown. Paying 15 percent on £306,561 beats paying 47 percent on £31,764 before it has grown at all.

Route for £15,000	Company profit needed	Value at 60	After withdrawal tax
ISA, higher rate dividend	£31,764	£144,770	£144,770
Pension, same £31,764	£31,764	£306,561	£260,577
ISA, basic rate dividend	£22,866	£144,770	£144,770
Pension, same £22,866	£22,866	£220,689	£187,586

The gap is the extraction toll. To put £15,000 in an ISA the company first pays corporation tax at 26.5 percent, then you pay dividend tax at 10.75 or 35.75 percent. A pension contribution pays neither. Coming out, 25 percent of a pension is tax free and the rest is taxed as income, which is roughly 15 percent effective.
Your existing ISA is already the bridge. Left alone, the £70,403 remaining after the deposit compounds to about £400,000 by age 50, which covers nearly seven years at £60,000 before the pension opens at 57. That is why new money does not need to go there.
Revisit this at 40, not before. If stopping at 45 becomes the goal rather than 50, redirect contributions to the ISA from 40 and you still get ten years to build a longer bridge.

6.5% real, the S&P's record less fees 5% real, the prudent case Target £1.46m

Growth assumption	£60,000 a year at	Pot at 50	Pot at 60	Pot at 65
6.5 percent real	age 50	£1.46m	£2.97m	£4.15m
5 percent real	age 55	£1.11m	£2.00m	£2.64m

£15,000 a year is £1,250 a month, which is nine to sixteen percent of the £8,000 to £14,000 a month Hunt Visuals runs above break even. Realistic through the child years, which is why it beats £20,000 as a plan you will actually keep.
The ISA allowance is not dropping for you. The overall limit stays at £20,000. Only the cash ISA portion falls to £12,000 for under 65s from 6 April 2027. A stocks and shares ISA keeps the full £20,000.

What would break this

The assumptions doing the heavy lifting

6.9 percent real is the actual record

The S&P 500 returned 10.0 percent nominal and 6.9 percent real annualised from 1928 to 2025 with dividends reinvested. Take off Vanguard's platform and fund charges and 6.5 percent is the honest planning figure. It is also a dollar figure and the best century any equity market has ever had, which is why the five percent line is on the chart.

Sequence risk near the end

A forty percent fall at 58 does far more damage than the same fall at 28, because there is no time and no new money buying the recovery. That is what phase five de-risking is for.

A partner changes everything

Two state pensions, shared housing, shared child costs. Published couple figures are materially less than double the single ones, so this plan is deliberately the pessimistic version.

Access ages will move

Only the rise to 57 in April 2028 is law. Beyond that, policy intent is roughly ten years below state pension age. Worst realistic case costs one or two years, which the ISA half of the split covers.

The new 22 percent cash charge

From 6 April 2027, interest on cash held inside a stocks and shares ISA is charged at 22 percent. Whether a money market fund counts as cash for this is not clear and it affects both the deposit de-risking and the LISA. The exposure is small, roughly £100 to £175 a year, but it needs confirming.

The £450,000 cliff

Buy a home for a penny over £450,000 and the whole Lifetime ISA withdrawal takes a twenty five percent charge, destroying roughly £3,300. With capacity possibly at £560,000 this is reachable for the first time.

Hunt Visuals is not in the number

A sale is the most likely route to finishing far earlier than any track here. It is also illiquid, depends on Lloyd personally, and may be worth nothing. Upside, never the plan.