We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Appreciate feedback...
Options
Comments
-
Nationwide8 wrote: »Again Sorry if an obvious question but if you invest in a PP is your investment guaranteed safe ? ...
I'd welcome a professional's view, but my understanding is that you have investment protection up to £50k: that protects you from fraud, of course, not from bad investment decisions that you've made.Nationwide8 wrote: »On a quick look Vantage PP seems to be the one HL promote the most ?? And if you invested in this hopefully it would increase in value over and above the 20 % added by the tax relief ? Yes ?..
(i) Yes; that's the SIPP I use. (ii) No; the 25% gain is guaranteed because it comes from the taxman. Any further gain depends on what you choose to invest in. If you are risk-averse, and anyway plan to remove the money in (say) the next five years, then you'll probably choose to invest only in cash (or "deposit" or whatever they call it). Then you'll get interest on the money, but at present that will be next-to-nothing.Nationwide8 wrote: »Also just from above if you invest a lump sum eg £16000 does £4000 just appear in your SIPP a few weeks after 55 ?
It appears a few weeks after you've made your contribution: that's the time it takes for HMRC to cough up the money to HL. So in your case it'll be in your pension pot months before you reach 55.
By the way, if you do opt for HL, choose their paperless service; it keeps the charges down.Free the dunston one next time too.0 -
Again Sorry if an obvious question but if you invest in a PP is your investment guaranteed safe ? ...
Risk is not on/off. it is a sliding scale and the risk level will depend on how you invest. If you pick unregulated investments you could lose the lot. If you pick mainstream investments and invest within your risk tolerance then its more about averaging out the ups and downs. if you invest too cautiously, you may actually be taking more risk as you replace investment risk with shortfall risk and inflation risk.
Pensions have the £85k investment protection scheme but this does not apply to the investment value. (i.e. a loss of money due to investment returns). It mainly applies to fraud (if a regulated investment results in a loss due to fraud or rule breach you are covered). It only applies to regulated investments. If you use unregulated investments, you get no consumer protection.On a quick look Vantage PP seems to be the one HL promote the most ?? And if you invested in this hopefully it would increase in value over and above the 20 % added by the tax relief ? Yes ?..
Depends on how you invest but most mainstream investments increase over time. They just zig zag on their way.Also just from above if you invest a lump sum eg £16000 does £4000 just appear in your SIPP a few weeks after 55 ?
With some providers (the more financially secure ones and ones focused on quality) they will immediately add the tax relief (known as prefunding). Others wait until the tax relief arrives a month or so later (typically its those the less financially secure ones or the ones operating on a lower profit margin that do not prefund).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Nationwide8 wrote: »
Again Sorry if an obvious question but if you invest in a PP is your investment guaranteed safe ? ...
...
In addition to Kidmugsy's reply....
With a bank, you pay them some money and they own it. All you have is a promise from the bank to pay you back. So if the bank fails you lose your money unless there is a compensation scheme in place.
With funds on a platform, your pension always owns the money. The PP provider and the fund manager only have authority to manage the money but they dont own it. So if either go bust, as your pension funds are held separately from their monies, management of your pension could and would be passed onto someone else.
So it is difficult to think of circumstances where the £50K compensation scheme would come into effect - fraud and gross error are the only things that come to mind. Either should be extremely unlikely if you use FCA registered companies.0 -
Nationwide8 wrote: »HL have an income drawdown calculator
So if I put in investment £20000 ( inclusive of the £4000).. put in born 1959 now .age 55
Aye, but it's for the present rules, not for Mr Osborne's flexible new world.Nationwide8 wrote: »0% lump sum "tax free cash at retirement"....do they mean SPA ?
(i) That ""tax free cash at retirement" is the money everyone gets tax-free, irrespective of their income. So if Lady Snooty of Islington withdraws £4000 in a tax year, £1000 is tax-free, even if her income is a hundred thousand pounds that year.
(ii) By "retirement" they mean the date on which you "crystallise" your HL pension, i.e. start taking money out.Nationwide8 wrote: »Max yearly income comes out as ...£1290 ( £107 not that £138 above )
So 12yrs ( 55-67 ) x 1290 = £15480
So at 67 I could close the SIPP and take out remaining £4520 ?? ( less charges for the 12 yrs it's been open )
All irrelevant: the new rules let you withdraw whatever you want after age 55.Free the dunston one next time too.0 -
Nationwide8 wrote: »My income from pension/s and interest from savings accounts would be less than £10000 so I wouldn't get taxed anyway ? Correct ?
OK..so I just need to find out how much of the £20000 will disappear in fees/charges for however long i keep the SIPP to work out what I'll have left………
So as regards your answer quoted...what's to stop me opening a SIPP now with £16000...tax man bumps it up to £20000....I take it all out a day after I'm 55 and have made a healthy profit ?
You'd pay tax on about £5k of it: £1k tax.Free the dunston one next time too.0 -
Nationwide8 wrote: »Actually kidmugsy,after getting over the rudeness of your last post ( which is baffling considering how helpful you have been previously )....I'm not going anywhere,who are you to tell someone "to stop posting here" ?
People can choose to read/reply or not,i politely suggest if my posts annoy you then it's up to you to stop reading/replying rather than you telling me to stop posting.
I think he's frustrated that you're missing the point and potentially making a poor financial decision, even though it has been explained to you how to make a good financial decision. Re-read the posts from kidmugsy (for example post #28) that mention the new rules.
You invest £16,000 into a pension this year and then withdraw it as £20,000 next year, and then you put it into a bank account to get your "risk free" interest. You don't have to lock the money away in the pension because you're about to reach 55, 55 is the age when you can withdraw from a pension. You put the money in at 54 (attracting tax relief!) and take it out at 55. Then you do whatever you want with it. Your £16,000 becomes £19,000 (£20,000 - £1,000 tax paid) in a year.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.8K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.6K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards