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  • FIRST POST
    • billpaul812
    • By billpaul812 11th Dec 17, 1:19 AM
    • 59Posts
    • 5Thanks
    billpaul812
    What happens when you start to take your SIPP?
    • #1
    • 11th Dec 17, 1:19 AM
    What happens when you start to take your SIPP? 11th Dec 17 at 1:19 AM
    If you take it as a 25% lump sum plus drawdown, does the SIPP effectively get frozen at that point, ie can't pay any more in? I presume that it will still grow a bit depending on the chosen investment options.

    Just wondering this because if any more is paid in then there would be another lump sum wouldn't there.

    Confused.
Page 1
    • p00hsticks
    • By p00hsticks 11th Dec 17, 1:54 AM
    • 5,892 Posts
    • 5,858 Thanks
    p00hsticks
    • #2
    • 11th Dec 17, 1:54 AM
    • #2
    • 11th Dec 17, 1:54 AM
    If you take it as a 25% lump sum plus drawdown, does the SIPP effectively get frozen at that point, ie can't pay any more in? I presume that it will still grow a bit depending on the chosen investment options.

    Just wondering this because if any more is paid in then there would be another lump sum wouldn't there.

    Confused.
    Originally posted by billpaul812
    As I understand it the amount you have at the point you take the 25% becomes 'crystallised'. Anything you add in future goes into a new separate 'uncrystallised' part of your SIPP.
    • billpaul812
    • By billpaul812 11th Dec 17, 6:00 AM
    • 59 Posts
    • 5 Thanks
    billpaul812
    • #3
    • 11th Dec 17, 6:00 AM
    • #3
    • 11th Dec 17, 6:00 AM
    Makes sense, thanks
    • sandsy
    • By sandsy 11th Dec 17, 8:03 AM
    • 1,252 Posts
    • 735 Thanks
    sandsy
    • #4
    • 11th Dec 17, 8:03 AM
    • #4
    • 11th Dec 17, 8:03 AM
    You can still pay in after taking the tax free cash (assuming you're not breaking the recycling rules).

    However, if you start taking income/lump sums from the remainder (which still remains invested), your contribution is limited to the 'money purchase annual allowance', currently set at £4000 for this tax year rather than the usual limits.
    • billpaul812
    • By billpaul812 11th Dec 17, 9:07 AM
    • 59 Posts
    • 5 Thanks
    billpaul812
    • #5
    • 11th Dec 17, 9:07 AM
    • #5
    • 11th Dec 17, 9:07 AM
    On the recycling is that all about qualifying income etc or do HMRC look into exactly how the investment is funded?
    • Linton
    • By Linton 11th Dec 17, 9:20 AM
    • 8,863 Posts
    • 8,900 Thanks
    Linton
    • #6
    • 11th Dec 17, 9:20 AM
    • #6
    • 11th Dec 17, 9:20 AM
    On the recycling is that all about qualifying income etc or do HMRC look into exactly how the investment is funded?
    Originally posted by billpaul812
    http://www.pruadviser.co.uk/content/knowledge/technical-centre/pension-recycling/
    • AnotherJoe
    • By AnotherJoe 11th Dec 17, 12:03 PM
    • 7,905 Posts
    • 8,498 Thanks
    AnotherJoe
    • #7
    • 11th Dec 17, 12:03 PM
    • #7
    • 11th Dec 17, 12:03 PM
    When I cashed my full 25% in*, I was left with 75% in a new one called "Drawdown SIPP" and the original empty SIPP (that would be the recipient of any more payments eg the £2880 or whatever)


    * done because I'm nudging the LTA
    • NorthernGeezer
    • By NorthernGeezer 9th Jan 18, 11:04 PM
    • 39 Posts
    • 5 Thanks
    NorthernGeezer
    • #8
    • 9th Jan 18, 11:04 PM
    Dont Crystalize
    • #8
    • 9th Jan 18, 11:04 PM
    So would i be right in assuming you don't crystalize until you absolutely need to as its a red line you cross, a point of no return?
    • dunstonh
    • By dunstonh 10th Jan 18, 1:08 AM
    • 90,396 Posts
    • 57,173 Thanks
    dunstonh
    • #9
    • 10th Jan 18, 1:08 AM
    • #9
    • 10th Jan 18, 1:08 AM
    So would i be right in assuming you don't crystalize until you absolutely need to as its a red line you cross, a point of no return?
    Originally posted by NorthernGeezer
    The general rule of thumb is to not access the pension unless you need it or it is for tax efficiency.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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