The next phase begins - time to clarify my thinking...

steelbru

I was going to post this in the Pensions part of the forum, but since we're talking about SIPPs and the 6.25% gain...........

I've taken early retirement, and am already getting a DB pension paid monthly, I'm a lower rate taxpayer.

Does this pension income count as "earnings" when working out how much can be paid into a SIPP ? Or for SIPP purposes do I count as having no earnings and would be limited to £3600 gross ( £2880 net ) ?

I have almost 6 figure sum in a S&S account, which I will Bed'n'ISA £15k'ish a year into a S&S ISA, but was wondering if I could get an extra 6.25% by also putting some into a SIPP every year ?

Also, I understand you're not supposed to re-invest any money that's been paid to you as part of a TFC lump sum back into a pension. How do they determine this if I already had savings before receiving the TFC lump sum ?

badger09

steelbru wrote: »

I was going to post this in the Pensions part of the forum, but since we're talking about SIPPs and the 6.25% gain...........

I've taken early retirement, and am already getting a DB pension paid monthly, I'm a lower rate taxpayer.

Does this pension income count as "earnings" when working out how much can be paid into a SIPP ? Or for SIPP purposes do I count as having no earnings and would be limited to £3600 gross ( £2880 net ) ?

I have almost 6 figure sum in a S&S account, which I will Bed'n'ISA £15k'ish a year into a S&S ISA, but was wondering if I could get an extra 6.25% by also putting some into a SIPP every year ?

Also, I understand you're not supposed to re-invest any money that's been paid to you as part of a TFC lump sum back into a pension. How do they determine this if I already had savings before receiving the TFC lump sum ?

I'm in a similar position

I'm afraid you're limited to £2880 net, £3600 gross.

steelbru

Thanks for reply badger09.

Did you do it in the end, or did you not think it was worth it for 6.25% on £2880, ie £180 pa ?

Is it 3 years unused allowance you can go back on pension contributions ? Does that mean I could start off with £8640 contribution now, then 6th April another £2880 ?

saver861

steelbru wrote: »

Thanks for reply badger09.

Did you do it in the end, or did you not think it was worth it for 6.25% on £2880, ie £180 pa ?

As above, I'm on an occupational pension and limited to the £2880.

If you are a non tax payer it would definitely be worth it - as for being brt - I can't make my mind up to be bothered to do it or not.

steelbru

Yeh, not decided either.

It's £180, so "free" money, but the money I would be putting in is already invested, so cost of selling then buying again. Plus the SIPP yearly fees, which on my current platform iWeb would be about £90pa I think, or go with an alternative platform the cheapest I've seen is 0.3%pa which would be a lot cheaper.

kidmugsy

steelbru wrote: »

Is it 3 years unused allowance you can go back on pension contributions ? Does that mean I could start off with £8640 contribution now, then 6th April another £2880 ?

No: your permitted contributions are capped by your annual earnings, or £3600 gross if bigger. The pension you receive is "income" but not "earnings".


Also:
http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/recycling-tax-free-cash

mgmen

PeacefulWaters wrote: »

Work on the assumption that it won't survive.

Thanks for sharing this. I was really inspired from you. :T