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Starting SIPP for future non UK resident

I've been reading through MSE for quite a while now and I found it really helpful so far, but I couldn’t find anything that somewhat describes my situation. Therefore I'm looking for advice and opinions.

I'm turning 31 soon and I really should think about investing in any sort of pension scheme. I'm originally from Italy, but I haven't been there for the last 10 years. I was mainly moving from one EU country to another, which might be one reason why I pushed the decision of investing into a pension so far ahead.

I'm currently employed in UK with a contract for 2.5 years. After that I might move again, depending on where my next job will be. My employer pays into the Universities' Superannuation Scheme (USS) pension scheme, but I would really like to consider setting up an additional pension for myself, in which I can keep contributing until I retire. I currently have distributed savings of around 80k.

I was thinking in setting up a SIPP. As far as I understood, I can pay into a SIPP up to 100% of my net income and not more than 50k per year in order to be eligible for tax relief and to avoid any penalty taxes. After that (in case I leave UK), I can contribute up to 3.600 (2.880 net + 20% tax) per year for the next 5 years. I was thinking of paying 15k for the first 2 years and then 3.6k for the following 5 years, which would leave me a pot of 48k.

If I’m not mistaken, then any contribution to the pension pot (after the 5 years) would result in not getting any tax relief. However the pension that I would get paid out will be taxed. Therefore I assume it would not be wise for me to keep paying into the pot after I become non UK resident, but the pot can keep growing until I retire or be moved to a QROPS (which comes with extra costs and would need to be transferred again every time I move to a different country – besides I’m not quite sure how it works and it seems that not every country is part of that scheme).

Do you think that my idea of setting up a pension scheme would not be worth the money? What else can I do instead of putting my money in savings? I fear that my state pension collected over the years from different countries, will not be sufficient to guarantee me a proper income when I'm old.

I would be really grateful for any advice I can get.

Comments

  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You can set up a sipp while you are living and working here, but you can only contribute to it while you are UK resident. Once you leave, it and your USS pension will have to sit/defer. So do look at a Sipp with the lowest annual charges as you'll still pay them after moving.


    You could also set up a non wrapped brokerage acct, and that could continue receiving money after you left.
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