ISA, pension, general account — the order you draw them decides how much tax retirement pays. The mechanics of filling the personal allowance, the GIA-first doctrine, and how April 2027 rewrites the classic advice.
Two retirees with identical wealth can pay wildly different lifetime tax purely on the order they spend their accounts. The rules that decide it are few: pension withdrawals are taxable income (beyond the 25% tax-free element), ISA withdrawals are never taxed, and a general investment account leaks tax annually on dividends and on gains when sold.
Every year of retirement, the first £12,570 of taxable income is tax-free — and unlike an ISA allowance, an unused personal allowance is gone forever. A retiree living entirely on ISA money "tax-efficiently" while their pension compounds may be walking past £12,570 of free pension withdrawals every single year. Before the State Pension starts (which then consumes most of the allowance by itself), drawing at least that much from the pension annually is close to a free lunch: taxable income, taxed at nothing.
A general investment account pays dividend tax every year and CGT on the way out; ISAs and pensions compound untouched. Spending the GIA first — using the £3,000 CGT exemption and £500 dividend allowance while they last — stops the annual leak soonest and leaves the sheltered wrappers growing. That much survives 2027 unchanged.
The old doctrine finished: "…and spend the ISA before the pension, because the pension escapes inheritance tax." From April 2027 unused pensions join the estate, and the endgame reverses for many: pension income filling the basic-rate band each year (paying 20% now to avoid 40%+ later) while the ISA rides along — still tax-free to draw at any moment — becomes the arguable default. The right answer depends on estate size, spouse position and beneficiary tax rates, which is exactly why it should be projected rather than asserted.
Hundred Summers lets you set the drawdown order itself (ISA-first, pension-first, or any ordering) and re-projects every year of your plan under it — tax charged per source by the real band functions, so the lifetime tax cost of each ordering is a number, not a doctrine. The 2027 guide covers the estate side in full.