Pre tax transfer

tonksy154

Hello all! Just hoping to get some quality, experienced advice.

I have been in the fire service for 17 years & am looking to leave in the next 12 months. Last year I stopped my pension contributions of £300 pm to invest and monitor myself. Admittedly, this has been a long term, slow growth move. My issue is that because this goes out after tax, I only have about £130 to invest, the difference being eaten up with tax & NI contributions.

I was wondering if I would need use of an IFA or similar & if I could invest this money pre-tax (so that I can utilise the £170 difference) into a SIPP or stocks??

Thank you for any good advice you can offer.

Regards,

Rob

LHW99

If you open a SIPP, then you get tax paid back into it by HMRC (effectively you pay a NET amount, but the SIPP will get the gross amount once tax is reclaimed by the platform).
If you pay higher rate tax, I think you have to claim the difference between that and basic rate back from HMRC.
You are limited to contributing an amount equal to your earned income, or less if you are already drawing a pension.
Hargreaves Lansdown are good for small amounts / beginners, but not the cheapest. Search the boards to see what other people recommend.

green_man

Is this just AVC contributions? I assume you are still in the Fire Service Defined Benefit Pension?

Unless you definitely need the money you are investing before you are 55 I would have thought that continuing putting into the Fire Service Pension is likely your best option.

Also, Unless the Fire Brigade pay is significantly higher than I thought you should have more than £130 net from £300 gross.

atush

If you stopped contributing to the fire service, and invested after tax money instead, I feel you made a very big mistake. If you can, opt back in now.

By all means, save outside the DB pension, in AVCs, a PP or Sipp, or a S&S isa if you like.

The questions you ask are reasonable, but only highlight the mistake you made as you dont have any idea how to invest the money.

IMHO, the amount is too small for an IFA at this point, so would suggest you use a global traker if you want 100% equities, or a lifestyle fund like vanguard if you want a mix of assets. This will bring you some diversification and at a low cost.