Can I run a SIPP alongside my LGPS pension?

blizeH

Hi,

I'm considering getting a SIPP and just paying a small amount into it each month to help with retirement, and take advantage of the tax free benefits, however, I already have a pension running through the LGPS - can I have both?

It's probably a silly question and I cannot see anything stating that I can't, but similarly I can't find anything saying that I can... if I search on Google it just brings up a load of results relating to transferring between them.

Thanks!

kidmugsy

Yes you can.

browneyedbazzi

Have you looked into setting up AVCs? If you're a LGPS member there are some really attractive tax benefits to AVCs. If you start AVC contributions before 1st April this year you get the tax relief when you pay in but you'll also be able to take up to 100% of your fund back as a tax free lump sum on retirement.

The rules are changing from 1st of April so if you start after that you'll only be able to take up to 25% of your fund tax free. If you'd like a lump sum on retirement it's well worth looking into now before the change comes in!

blizeH

Thank you both! I haven't looked at AVCs but I think that could be worth while... I was going to open a SIPP and basically throw everything into a Vanguard fund, but as far as I can tell, the LGPS pension will give a better return than that.

My only problem with AVCs (and the reason why I would like a Sipp) is because I would hopefully like to retire before I'm 65, and afaik with the LGPS I will have to wait unless I can get approval from management to retire earlier.

Thanks again

FatherAbraham

blizeH wrote: »

I'm considering getting a SIPP and just paying a small amount into it each month to help with retirement, and take advantage of the tax free benefits, however, I already have a pension running through the LGPS - can I have both?

If you have LGPS, then you should look at ARCs before you consider SIPP or AVCs. The benefits of doing so can be enormous. ARCs are massively underpriced.

Time for making new ARC contracts is running out fast, since LGPS 2008 closes for new contributions at the end of the financial year -- so get a move on!

Warmest regards,
FA

Neasy

Hi. Are ARCs preferable to pre-2008 Added Years?

Ta

blizeH

Sorry for the silly question, but do you have any information regarding ARCs with the LGPS scheme please? I can't find anything online

hyubh

Neasy wrote: »

Hi. Are ARCs preferable to pre-2008 Added Years?

Probably not, but who knows, you might be an exception.

hyubh

blizeH wrote: »

do you have any information regarding ARCs with the LGPS scheme please? I can't find anything online

You are joking, right? Given the national scheme/local funds setup, the information is duplicated multiple times: http://www.google.co.uk/#q=LGPS+ARC

FatherAbraham

Neasy wrote: »

Hi. Are ARCs preferable to pre-2008 Added Years?

I don't understand where pre-2008 added years come into the picture. You can't make a new pre-2008 added years contract, since that scheme closed to new contribs in 2008.

ARCs are, in many cases, better than money-purchase alternatives (SIPP, AVC). Not always (not for people with a short life expectancy, for example).

If you have an existing added-years-purchase contract from the pre-2008 scheme, how come that's suddenly come into question?

Warmest regards,
FA

woolly_wombat

blizeH wrote: »

My only problem with AVCs (and the reason why I would like a Sipp) is because I would hopefully like to retire before I'm 65, and afaik with the LGPS I will have to wait unless I can get approval from management to retire earlier.

ISAs (and possibly also a Sipp) would be a good way to fund the gap between early retirement and receiving unreduced LGPS pension.

The exception could be if you were in the LGPS prior to 1 October 2006 and have Rule of 85 transitional protection. For more details see:
http://www.cheshirepensionfund.org/wp-content/uploads/2013/10/Protections.pdf

WW