We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
SIPPS: put in £2808 per annum and the government tops up to £3,600?
Options
searcher30
Posts: 356 Forumite
SIPPS: put in £2808 per annum and the government tops up to £3,600?
just read an article in The Mail about Sipps and how the government tops up the money if are unemployed, retired with no income or investing for children. how does this work exactly. thanks in advance
just read an article in The Mail about Sipps and how the government tops up the money if are unemployed, retired with no income or investing for children. how does this work exactly. thanks in advance
0
Comments
-
Nothing has changed on that front since 2001 when unemployed, retired or those with no income were first able to do this.
You can write a cheque for £2808 and the govt increases that to £3600 with tax relief when investing in a stakeholder, personal pension, hybrid SIPP or full SIPP.
You then can commence benefits at any time between age 50 (increasing to 55 from 2010) and age 75. The commencement of benefits can happen overnight or be delayed to allow some investment growth.
Which pension product you use would depend on your circumstances.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The Government will tax the income from the pension you eventually get (other than the 25% taf free cash lump sum.) when you retire
So most of the pension is not actually tax free, it's tax deferred.Trying to keep it simple...
0 -
EdInvestor wrote:The Government will tax the income from the pension you eventually get (other than the 25% taf free cash lump sum.) when you retire
So most of the pension is not actually tax free, it's tax deferred.
Not necessarily. A non taxpayer wouldnt pay tax on it if it doesnt take them into the tax bracket.
An immediate vesting personal pension for a 65 year old could result in an equivalent income at 10% gross p.a. A non-taxpayer looking to boost income could find that attractive. Even a basic rate taxpayer could find that attractive, especially if they left the fund to grow for a period, in which case that 10% figure increases when they do finally take it.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
have to read this properly again as not that clear to me.
I'll get back to you
Thank you everyone0 -
Someone else has posted a similar question in the tax forum. It appears the Daily Mail have done it again. Drop a little information which is not fully accurate or explained correctly in front of people that dont understand the subject matter.
It would be nice if the Mail could print some decent financial services material sometimes. It has such a poor reputation amongst professionals that the "know it all but really know nothing" type of person is referred to as a Money Mail person (whether they read the Mail or not). They always seem to go with 60% of the story and leave the rest out which is stupid when you consider the people who are their target market.
Ed, have you got a link to this article by any chance? I cant see one on the Mail website and you are always good with media articles. It would be nice to see how they have managed to confuse people with pension contributions rules that havent changed since 2001 and with SIPPs (that have been round even longer).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
OK forget about SIPPs for now .. a SIPP is a particular kind of pension - one that allows you to manage the way your pension savings are invested.
But let's take a step back and simply look at a bog-standard pension plan.
Take a look at this site and then come back to us with any further questions
HTHWarning ..... I'm a peri-menopausal axe-wielding maniac0 -
Hmm, yes well, can't find the aricle, but as mentioned there's nothing new in it - you get tax relief if you invest in a pension (whether SIPP, stakeholder or personal) and you don't have to be working to get it up to the the 3600 level, as introduced 5 years ago.
I agree that the Immediate Vesting Pension version of this for someone over aged 50 with no income can be a good deal.Trying to keep it simple...0 -
Yes, this is the same for SIPPs as for stakeholders. The taxman gives you 22p for every 78p you put in. So if you put in £78 a month it immediately grows to £100 which can then be invested.
When the stakeholder scheme was first introduced, it was the first time that saving for pension, with help from the taxman, could be done from unearned income.
IMHO one of GB's better ideas!
Margaret Clare[FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
Before I found wisdom, I became old.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.2K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.2K Work, Benefits & Business
- 599.2K Mortgages, Homes & Bills
- 177K Life & Family
- 257.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards