Paying £2880 into pension when retired

borders

Thank you.

The_Book-keeper

saver861 wrote: »

There are effectively no charges if you use HL and put the money in cash. However, if you close the account in the first year you will get hefty closure charges.

So, put in your £2880, get £720 from HMRC. Withdraw £3550. Keep SIPP account open until next year and do same again, until 75. Dont forget tho, it is only £720 profit for those who wont reach the BR tax threshold.

Hi
I'm about to open one each of these for myself & my husband, and note that under the terms and conditions of this SIPP section E1, there is a mention of keeping £1k minimum in the account, conditions were revised from 1st January 2017, has anyone any knowledge/experience of this? Thanks

bob_a_builder

Is that with HL ?

Has been mentioned before as one of the limitations with them

Earlier up the thread ( or maybe in another one on same subject) someone said that the Virgin SIPP didn't have such a limitation ( or may be not such a large amount)

Vortigern

jamesd wrote: »

For a PCLS the minimum threshold for even possible recycling restrictions only happens when at least £7,500 of PCLS has been taken in a rolling twelve month period.

At the sorts of levels considered in this topic it's fine to do things like borrowing and repaying with the lump sum money because the £7,500 won't be exceeded except possibly by those just retiring or taking out more lump sum than you can get in one year from paying in 2880.

In the case where a schoolteacher stops working in August 2015, and draws her teacher's pension at NRA60 in May 2016 with a £35K lump sum, can she pay £2880net into a SIPP/PP in the current tax year, or would this fall foul of the recycling rules?

jamesd

No problem for her. £2880 when grossed up to £3600 is less than 30% of £35000 so it's within another of the recycling limits. It is also unlikely that she planned the recycling at the time of taking the lump sum and in that case there is no limit on recycling.

junebaby

I have 2 years SIPP money sitting with HL, £7,200. I am a non taxpayer. Come April and the next tax year would I be able to withdraw £2880 and then pay it straight back in to cover next year's SIPP payment?

where_are_we

Yes, provided you are 55 or older. You say you are a non tax payer. Depending on your taxable income you could pay very little or no tax on your SIPP withdrawal. Your personal tax allowance for 2017-2018 will be £11500 and, if the sum of 75% of your SIPP withdrawal (25% is tax free) added to your taxable income, is less this you will pay no tax (you may have to claim this back from HMRC).
I have used a UFPLS (Unconsolidated FundsPension Lump sum) from my SIPP to reach my personal tax allowance and pay no tax.
Do this each tax year. Why not take a UFPLS this tax year to reach your personal allowance. Remember to complete this before 5/4/17 and that the personal tax allowance for 20116-2017 is £11000. Remember to keep £1000 in your HL SIPP to avoid closure charge.

Ganga

Do not forget that the sum ie £3600 can go up or down depending on the markets,i only speak from experience as both my wife,s and my own are standing at £3520.Possibly should have drawn the lot out the moment the sum was uplifted from £2880 to £3600 but only check it now and again and it took a while for the uplift to be added by Virgin Money.

jamesd

Yes, but I suggest taking the 25% tax free lump sum from it all then monthly income and making monthly contributions instead. That gives HMRC plenty of time to get the tax code for the income sorted out.

Also be aware that to you take any of the taxable 75% your annual cap on future contributions falls to £4k. This could hurt those who are still working and could pay in more. This includes taking an Uncrystallised Funds Pension Lump Sum ( UFPLS) because those are automatically 75% taxable.

busybee100

Hi.
I thought I understood but now we are talking about UFPLS I'm thinking I may have been wrong.
Is the 25% withdrawal tax free regardless of PA or is it only 25% of the withdrawal that's tax free?
My friend is 62 and still working, she earns around 12k. I'm wondering if this may be a useful way for her to make a little bit more on her savings.