Pension plan for self employed SIPP ideas ?

Luckyinlife

Hi guys im self employed in my late 20s now 27 and would like a little something in a private pension for when im 55

Im self employed so 1 year i could be 20% tax payer and next i could be 40% its just how it is

Now i don't want to chuck loads of money into a private pension but being a 40% tax payer this tax year 2014/15 i may as well take advantage of the tax releaf i can get

So i was number crunching and if i put say £3000 into my pension
i would put £2400 in + 20% from government which would make it upto 3k i could then claim back £600 on my tax return from paying 40% tax
thus costing me £1800 for a 3k investment

So my question is where and what should i put it into ?

Or does anyone have ideas for what a good plan for someone of my age would be ??

i know i can take 25% tax free when im 55 which i know would help me a lot so weather this is 1k or 50k at the time i will be glad i did a pension :]

xylophone

It might be better to commit yourself to a regular contribution into the SIPP, topping up when you can, otherwise you could be heading for an old age in straitened circumstances.

Re state pension https://www.gov.uk/new-state-pension/overview

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

Your figures aren't quite right.

Tax relief calculator here http://www.hl.co.uk/pensions/sipp/tax-benefits-of-a-sipp

Luckyinlife

Thanks for that i got my calculations from HL
i pay 2400 government give me 600 i then claim back 600 from tax return as im a 40% tax payer so pay 600 less tax on my bill

Thats what it tells me anyway
I guess its just somthing on the side for me for long term i have other ideas for my old age but cant act on these for a few years yet

xylophone

i pay 2400 government give me 600 i then claim back 600 from tax return as im a 40% tax payer so pay 600 less tax on my bill

This depends on the figure put in as total taxable income for the year.

I should have said not necessarily quite right.

For example suppose you put £44000 into the calculator as total taxable income and see what can be reclaimed from HMRC.

Once the money is in the SIPP you would wish to choose an investment - fund/share etc.

You might start with a global tracker, for example.

http://monevator.com/cheapest-pension-diy/