Vanguard Life Strategy

takesyourchances

The Vanguard small cap tracker is often used along side the VLS, I recall reading before about a FTSE 250 tracker being used with the VLS, would these trackers not overlap the VLS and add another tilt?

My SIPP is sole VLS 80% so far. Interested if the FTSE 250 would add a worth while tilt. I am still considering merging my stakeholder pension into my SIPP and monthly stakeholder payments into the SIPP as well.

Thanks.

le_loup

takesyourchances wrote: »

The Vanguard small cap tracker is often used along side the VLS, I recall reading before about a FTSE 250 tracker being used with the VLS, would these trackers not overlap the VLS and add another tilt?

Almost any other investment (ex cash) will overlap VLS. But if you want to be overweight in small cap or UK or emerging markets, a tilt in that direction is a perfect compliment.

takesyourchances

le_loup wrote: »

Almost any other investment (ex cash) will overlap VLS. But if you want to be overweight in small cap or UK or emerging markets, a tilt in that direction is a perfect compliment.

Thanks for that, if I transfer my stakehholder across to my SIPP i might consider these tilts with the VLS80.

mark55man

gadgetmind wrote: »

I put as much as I can into a SIPP, as much as I can after that into ISAs, and have some unwrapped holdings too.

If you get the tax savings, and can leave the money untouched until age 55, then use a SIPP.

gadgetmind is correct, but only if you don't need the money. However even if you don't put all your lump sum in, you should put regular payments in. you should regard pension as a cost of living just like electricity - not something to be one if you haven't spent it all that month


be slightly careful though as a relative youngster they move the 55 age (at which you can draw from SIPPs) to mirror the increase in state retirement age (I have seen observations saying it will track but 10 years younger)

guitarman001

If I'm a higher-rate taxpayer and wanted to start putting £200 a month into a SIPP... am I right in saying that I would only have to put in 0.6*200 = £120 and it shows up in the SIPP as £200? What is involved regarding writing to the government (if I need to re-claim tax etc). If I pay enough into a work pension which effectively means I pay no 40% tax... am I still eligible for 40% relief on the SIPP?
What if I want to transfer say £10k from a cash ISA (or even stocks ISA) into a SIPP - what relief would I get on that?
If you have to reclaim the top 20% from the government,... how does that even work!? When does the money get put into the SIPP?

I'm ok sticking with Hargreaves for my ISA for now... but NOT for a SIPP where costs would become a real big issue.

gadgetmind

guitarman001 wrote: »

If I'm a higher-rate taxpayer and wanted to start putting £200 a month into a SIPP... am I right in saying that I would only have to put in 0.6*200 = £120 and it shows up in the SIPP as £200?

No, you put in £160 and the government will put in the other £40.

What is involved regarding writing to the government (if I need to re-claim tax etc).

Call them and they will change your tax code. Or just reclaim via self assessment.

If I pay enough into a work pension which effectively means I pay no 40% tax... am I still eligible for 40% relief on the SIPP?

No, sorry.

What if I want to transfer say £10k from a cash ISA (or even stocks ISA) into a SIPP - what relief would I get on that?

Exactly the same as on any other money.

If you have to reclaim the top 20% from the government,... how does that even work!? When does the money get put into the SIPP?

The platform reclaims 20% tax on your behalf. With some platforms, the extra shows in your account straight away, but with others (including HL) it turns up a couple of months later.

guitarman001

So what if I put only enough into my company pension that I pay only £1 in higher-rate tax? Can I put as much as I like into my SIPP and get 40% relief... or do I only get relief on £1?

The last point.. I'm still not sure. After I fill out the tax form, from each year thereafter doest he platform add on 40% or do I have to wait until year-end in order to claim back that extra 20%? And will the percentage gains of that year be applied to that 20%?

By the way - thank you!!

gadgetmind

guitarman001 wrote: »

Can I put as much as I like into my SIPP and get 40% relief... or do I only get relief on £1?

Only on the £1, I'm afraid. Your pension contribution gets added to your basic rate band to extend it, which is how you get the extra as some income that was going to be taxed at 40% is instead taxed at 20%. If you're already at 20%, there is no effect.

After I fill out the tax form, from each year thereafter doest he platform add on 40% or do I have to wait until year-end in order to claim back that extra 20%?

The platform knows nothing about your tax situation and they only ever claim the extra 25% (from £160 to £200 using your previous example). You then claim an extra £40 either via self assessment or by adjusting your tax code. This £40 doesn't go into your pension but you've now got £200 in there with only £120 less in your pocket post tax (£160-£40)

guitarman001

Ooooh! So I don't get the extra £40 in the pension (no gains are applied to it) - it instead ends up as more wages (or rather, less money taken out of wages to go into the pension - given to me as a sort of rebate).

Thank you!

guitarman001

What happens to dividend tax... If I automatically re-invest into my lifestyle fund.... Do I get a dividend statement for this, then at the end of the year simply hand to hmrc this value multiplied by 22.5%?