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    • i was taught 2b cautious
    • By i was taught 2b cautious 11th Oct 16, 11:03 AM
    • 33Posts
    • 17Thanks
    i was taught 2b cautious
    hargreaves lansdown sipp for non tax payer
    • #1
    • 11th Oct 16, 11:03 AM
    hargreaves lansdown sipp for non tax payer 11th Oct 16 at 11:03 AM
    hi


    I am thinking of opening a hargreaves lansdown sipp for a family member, and try to follow what some others on this forum are doing.


    Family member is a non tax payer aged 58, and is not employed. Only income is approx. £500 from savings interest.


    1) Plan is to open up a hargreaves lansdown Sipp with a lump sum of £2880. Keep this all in cash with hargreaves lansdown. Receive tax relief of £720 in approx. 11 weeks. This will top up to £3600.


    2) Once balance is £3600, withdraw 25% (£900), then draw down £1700 or take in one go BUT leave £1000 in the sip so hargreaves lansdown do not close the account as a minimum of £1000 is required to keep the account open.


    3) repeat process in the next financial year.




    Is there anything wrong with doing the above, or can family member gain more by doing it differently?
Page 1
    • atush
    • By atush 11th Oct 16, 1:32 PM
    • 15,327 Posts
    • 9,209 Thanks
    atush
    • #2
    • 11th Oct 16, 1:32 PM
    • #2
    • 11th Oct 16, 1:32 PM
    AS long as you dont close it within a year, I think HL could be the way to go. Keep paying in, keep getting the extra 720.

    Does this relative get SP? What is their total income? Dont forget there is a new tax free savings allowance.

    Basically, they have a PA of 11K per year. any income draw from the pension over the 25% TF might also be tax free in the end (esp if you tell HMRC what you are doing).
  • jamesd
    • #3
    • 11th Oct 16, 1:44 PM
    • #3
    • 11th Oct 16, 1:44 PM
    That plan looks fine. Might instead want to set up monthly payments, though, of 1/12th the planned amount. Can also set up monthly contributions from next April to take care of most of the pension contributions using the income being taken out each month, with the lump sum being most of what is kept as extra gain from the tax relief.
  • jamesd
    • #4
    • 11th Oct 16, 1:46 PM
    • #4
    • 11th Oct 16, 1:46 PM
    Worth considering the rest of their situation if they have savings/investments. Depending on how the £500 is being generated it could be possible to raise it to 2500 using P2P that pays around 1% a month before bad debt, perhaps 10% a year after allowing for that.
    • i was taught 2b cautious
    • By i was taught 2b cautious 11th Oct 16, 2:07 PM
    • 33 Posts
    • 17 Thanks
    i was taught 2b cautious
    • #5
    • 11th Oct 16, 2:07 PM
    • #5
    • 11th Oct 16, 2:07 PM
    Thanks Jamesd, I think it was your suggestion someone else mentioned that got me thinking.


    My relative should get SP aged 66, total income is shy of £500 which is generated from various current account (Lloyds, TSB, and 2 x Tesco current accounts).


    They could also take a pension NOW from a previous employer (relative worked there for 3 years between 2000-2003), and can either take a one-off payment of approx. £7000 or approx. £230 per year. The one of payment looks appealing.
    • vvvvvvvvvvvvvvvv
    • By vvvvvvvvvvvvvvvv 12th Oct 16, 4:43 PM
    • 881 Posts
    • 1,373 Thanks
    vvvvvvvvvvvvvvvv
    • #6
    • 12th Oct 16, 4:43 PM
    • #6
    • 12th Oct 16, 4:43 PM
    If you start paying tax again can you pay more into the same SIPP in the same tax year.Can you have a SIPP and a company pension?
    • xylophone
    • By xylophone 12th Oct 16, 5:58 PM
    • 19,212 Posts
    • 10,924 Thanks
    xylophone
    • #7
    • 12th Oct 16, 5:58 PM
    • #7
    • 12th Oct 16, 5:58 PM
    If you start paying tax again can you pay more into the same SIPP in the same tax year.Can you have a SIPP and a company pension?
    You can have a company pension and personal pension (s) which includes SIPP.

    Re pension contributions

    http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/how-much-can-i-pay-into-a-pension
    Last edited by xylophone; 12-10-2016 at 7:01 PM. Reason: typo
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