New pensions for existing pensioners

traineepensioner

Hi,
My other half and I have taken early retirement and are drawing our final salary pensions. We are under state retirement age and we are both paying a slight amount of tax on both these pensions.:(
In light of the budget announcement regarding accessing pension pots, would it be possible/advantageous for us to start new pensions? How would we go about this?

Many thanks,

kidmugsy

traineepensioner wrote: »

In light of the budget announcement regarding accessing pension pots, would it be possible/advantageous for us to start new pensions? How would we go about this?

Possible - yes.
Advantageous - probably, but modestly.
How - using any one of the many providers often discussed here e.g. Cavendish Online, or Hargreaves Lansdown.

If you're quick you could both get in £2880 net (will become £3600 gross in your "pot") in this tax year.

Linton

kidmugsy wrote: »

Possible - yes.
Advantageous - probably, but modestly.
How - using any one of the many providers often discussed here e.g. Cavendish Online, or Hargreaves Lansdown.

If you're quick you could both get in £2880 net (will become £3600 gross in your "pot") in this tax year.

Providing you with a net gain of £180 each after taking the 25% tax free lump sum. Is it worth the hassle?

Vortigern

Linton wrote: »

Providing you with a net gain of £180 each after taking the 25% tax free lump sum. Is it worth the hassle?

Gain of £180 annually could be worthwhile if costs could be kept low.

Is there a low-cost PP or SIPP that would be suitable for such small amounts?

Linton

Vortigern wrote: »

Gain of £180 annually could be worthwhile if costs could be kept low.

Is there a low-cost PP or SIPP that would be suitable for such small amounts?

H-L fee for a triviality payment is £75. . Youinvest charge £150 to pay and close on the basis of triviality as do Bestinvest.

But its not just the costs, its also the time and hassle involved in dealing with the pension company.

coastline

If someone was to invest in a pension plan from 55 yo for at least 10 years under these circumstances which route should they take....guessing a Sipp might be expensive in early years.
£3,600 a year over 10 years at a little over 5% growth per year would give a pot of around £50,000...
Another question the tax relief on the £3,600 ...will this show up as a reduction on your tax code or is it a straight forward top up from the government...leaving the £10,000 basic allowance untouched.

kidmugsy

coastline wrote: »

Another question the tax relief on the £3,600 ...will this show up as a reduction on your tax code or is it a straight forward top up from the government...leaving the £10,000 basic allowance untouched.

The pension provider claims (£3600 - £2880 = £720) from the govt and it ends up in your "pot". Your personal allowance isn't affected unless you pay income tax at a higher rate.

traineepensioner

OK, Doesn't look like it's going to be worth the hassle after charges are taken into consideration

Thanks again for the advice though :beer: