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Revisiting the idea of SIPPs
Comments
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Do these answers conflict, or am I more confused than I realised?
They don't conflict - it's just a different way of looking at it. One looks at gross earnings minus DB pension contributions and one looks at taxable pay after pension contributions.If I use his taxable pay (as Gadget suggested) will I be OK?
This depends on how the pension contributions are paid.
With Gadgetmind's wife, her LGPS contributions are paid from gross salary so it reduces her taxable pay. Your husband's may well be the same.
Basically I find it easier to take gross earnings and then deduct DB pensions so that you will be sure. However taking taxable pay (if it's taking pension into account) is also correct.0 -
They don't conflict. It's confusing. There's the annual allowance of £40,000 and also the earned income limit of whatever those earnings are. The lower of the two limits applies. So kidmugsy is saying that he could pay in (£7,900 minus DB contribution) x 0.8 while jem16 was saying that potentially if he had a high enough income he could pay in up to £40,000.0
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If only we'd had some kind of "pensions simplification" exercise at some point ...I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
With Gadgetmind's wife, her LGPS contributions are paid from gross salary so it reduces her taxable pay. Your husband's may well be the same.
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I am beginning to remember why, when I first visited the idea of SIPPS, I decided to stick with ISAs!!
From DH's payslip:
Basic salary 657.01; Pace Complete NICE (DB pension) - 52.56; Gross Pay 604.45; Taxable pay 604.45.
I guess that's the same system as Gadget's wife, so I'm OK to use taxable pay?0 -
I am beginning to remember why, when I first visited the idea of SIPPS, I decided to stick with ISAs!!
Yes, more complexity, but also more free money. I'm a Yorkshireman, so I'd crawl naked through broken glass for free money!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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