SIPP, Hargreaves Lansdown and Funds

stphnstevey

I am just in the process of setting up a Ltd and was contemplating investing more in my S+S ISA. It occured to me that a better way now maybe for my company to pay into a SIPP for me. Can anyone advise on the which would be best tax wise?

sabelu

How do these work through HL believe at 50 you can take 25% lump sum and the balance becomes a drawdown pot.

purch

Tax credits do not take into account savings

No only the income you receive from your 'Savings' ........... if it is above
£ 300.00 a year

jamesd

sabelu, yes you can if it's before 2010, when the minimum age increases to 55. You can then ask HL to calculate the maximum permitted income you can take from the remaining balance (there's a small fee for this calculation) and can choose to take up to that amount as income each year.

dunstonh

Just read an article on SIPPs that was following on from independent research on those that hold SIPPs (carried out in Jan this year). It really does highlight the fact that SIPPs are being oversold and over bought by people that shouldnt have them.

Over half those surveyed had less than £25,000 in the SIPP
41% were contributing less than £100pm
Only 31% used a wide range of funds
38% didnt realise that large investment choice was a product feature.

The article basically concluded that publicity of SIPPs has made people want to buy one without realising what it is they are buying and how it compares to alternatives.

Those figures indicate that at least 1/3rd and possibly up to a 2/3rds would have been better off with a personal pension or stakeholder pension based on the contribution they are paying and/or how they were investing the money.

purch

Tick....Tick.....Tick.........:eek:

margaretclare

dunstonh wrote: »

Just read an article on SIPPs that was following on from independent research on those that hold SIPPs (carried out in Jan this year). It really does highlight the fact that SIPPs are being oversold and over bought by people that shouldnt have them.

Over half those surveyed had less than £25,000 in the SIPP
41% were contributing less than £100pm
Only 31% used a wide range of funds
38% didnt realise that large investment choice was a product feature.

The article basically concluded that publicity of SIPPs has made people want to buy one without realising what it is they are buying and how it compares to alternatives.

Those figures indicate that at least 1/3rd and possibly up to a 2/3rds would have been better off with a personal pension or stakeholder pension based on the contribution they are paying and/or how they were investing the money.

So, could one convert a SIPP, which is in drawdown, into an annuity?

sabelu

margaretclare wrote: »

So, could one convert a SIPP, which is in drawdown, into an annuity?

Cant really see that you'd want to as Annuity's are dead when you die whereas drawdown can be passed to your nominee

margaretclare

sabelu wrote: »

Cant really see that you'd want to as Annuities are dead when you die whereas drawdown can be passed to your nominee

Which was the reason why I went for a SIPP in the first place, transferred from a stakeholder. Just asking, following on from dunstonh's post above.

I didn't want to be forced to take another annuity at age 75, but nothing is growing in the present climate - it was very different a year ago, as we all know.

dunstonh

margaretclare wrote: »

So, could one convert a SIPP, which is in drawdown, into an annuity?

Yes they could (as they could with a personal pension as well).