Extra pension payments:

savinggrace24

Hi all, my question is about extra payments to my personal pension fund. if I were to add a large sum (up to £20k) and then decided to buy an annuity soon after, (3 months or so), what would the tax relief position be on the new amount invested?
I would be likely to take the full 25% tax free amount at the time of retiring and am wondering if this a good use of existing savings,
(due to impending redundancy, btw),

thanks in anticipation,

dunstonh

if I were to add a large sum (up to £20k) and then decided to buy an annuity soon after, (3 months or so), what would the tax relief position be on the new amount invested?

Timescale of investment is irrelevant. Indeed, you can buy immediate vesting personal pensions that turnaround the pension to annuity inside 24 hours.

Tax relief will be your applicable rate (basic/higher)

kidmugsy

With Hargreaves Lansdown (whose administration seems pretty good to me) the last time I contributed to their SIPP it took several weeks for HMRC to pass over the tax rebate into the SIPP.

dunstonh

The financially strong companies tend to prefund the tax relief (i.e. the insurers). The weaker ones or those operating on a limited budget tend to wait until it arrives some weeks later.

It does appear that prefunding is not common in the DIY market.

somethingcorporate

kidmugsy wrote: »

With Hargreaves Lansdown (whose administration seems pretty good to me) the last time I contributed to their SIPP it took several weeks for HMRC to pass over the tax rebate into the SIPP.

It's 5-6 weeks IIRC. There is a section where it will tell you when the tax relief is due to be added to the SIPP.

savinggrace24

Thanks for the replies, it helps to know the rough timescale if I do proceed along these lines,

Regards,

Bren