Thinking of dipping my toes into SIPPs

Im_just_careful

I'm interested in viewpoints please.

I've sufficient liquid savings to think of putting perhaps £3k a year over the next 5 years until my retirement into a SIPP as a way of investing in shares.

I have a reasonable occupational pension and fairly modest needs so this is money which I would otherwise put in an ISA or similar.

I appreciate that it can be difficult to release money from a SIPP and drawdown during retirement would be OK.

In my position would you do this or something else ?

jem16

Im_just_careful wrote: »

In my position would you do this or something else ?

You don't say what your tax position is?

If a higher rate taxpayer now who would be a basic rate taxpayer in retirement, a SIPP ( or indeed any pension ) would be a good idea.

If a basic rate taxpayer, it doesn't have the same advantage and you may be better considering a S&S ISA.

Im_just_careful

Excellent question.

Sufficiently into higher rate tax that the £3k would all be from income taxed at 40%

I would be a basic rate tax payer in retirement.

MoneyWealthKnowledge

Depends on the access you want in 5 years time?

Pension investing you're looking at tax relief on the contribution and on the shares, with the exception of the 10% tax on any dividends, but you can only get 25% of it out as a lump sum with the rest in income in retirement. Unless you ca n qualify for flex drawdown but this may not be tax efficient.

Stocks & Shares ISA would be another option, easier to access all the monies.

Might want to consider the platform and dealing costs under a Sipp vs an ISA?

jem16

Im_just_careful wrote: »

Excellent question.

Sufficiently into higher rate tax that the £3k would all be from income taxed at 40%

I would be a basic rate tax payer in retirement.

Sounds good then.

If your occupational pension plus state pension gives you at least £20kpa, you would be able to use flexible drawdown.

jem16

MoneyWealthKnowledge wrote: »

Might want to consider the platform and dealing costs under a Sipp vs an ISA?

With RDR and later the Platform Review, there should be no difference in costs between an ISA and SIPP.

Im_just_careful

While little in life is certain, I would anticipate being able to use flexible drawdown.

Many thanks for the comments.