Cheapest easiest way for a non-earner to put 2880 into a pension for a few years?

Stirfry

I have just opened a sipp with HL and put in 2880. I am over 55 and my plan is to take out 3600 once we get into the new tax year. I will be putting in a further 2880 and want to get my timing right to avoid the 295 + VAT. I plan to do this for the next 8 years until State retirement age. I retired in August this year and am currently receiving 4800 DB pension yearly.

My questions are:

Should I take a monthly amount of 240 to avoid paying tax?

When should I pay in next years 2880 to avoid the 295 + VAT?

Is there an ongoing charge for taking monthly amounts?

Thanks in advance.

zagfles

Stirfry wrote: »

I have just opened a sipp with HL and put in 2880. I am over 55 and my plan is to take out 3600 once we get into the new tax year. I will be putting in a further 2880 and want to get my timing right to avoid the 295 + VAT. I plan to do this for the next 8 years until State retirement age. I retired in August this year and am currently receiving 4800 DB pension yearly.

My questions are:

Should I take a monthly amount of 240 to avoid paying tax?

When should I pay in next years 2880 to avoid the 295 + VAT?

Is there an ongoing charge for taking monthly amounts?

Thanks in advance.

Isn't the charge just for closing the SIPP within a year? You'll probably be OK if you do what you're doing, but best give them a ring to discss. I'm sure they've had people doing the same.

SallyG

Is this tax relief at risk of removal in March?
Why does the Govt give 20% tax back to people who don't pay tax - not knocking it - just wondering..........

zagfles

SallyG wrote: »

Is this tax relief at risk of removal in March?
Why does the Govt give 20% tax back to people who don't pay tax - not knocking it - just wondering..........

Unlikely - if they go for flat rate then it wouldn't be flat rate if people on 0% get no relief. If anything I'd expect it to be more than 20%.

unimaginative_user_name

SallyG wrote: »

Why does the Govt give 20% tax back to people who don't pay tax - not knocking it - just wondering..........

I imagine it's an incentive to get people to save for their own retirement. Surely it's cheaper for the government to give people a maximum of £720 a year now than to have to pay some kind of benefit to cover all life's expenses in retirement. That £720 a year will (hopefully) grow into much more and potentially be taxed when the recipient retires.