Paying £2880 into pension when retired

vixen1500

Dazed_and_C0nfused 

Then you will have £2,700 taxable income and any earned income or pension income over £12,500 would indeed be taxed at 20% (unless you are Scottish resident for tax purposes).

 Thanks,  will redo my calculations with the £2,700 figure instead of £3,600 and see if I can get below the £12,500.  I had expected the personal allowance to have risen since the  2019/2020 tax year

Dazed_and_C0nfused

vixen1500 said:

Dazed_and_C0nfused 

Then you will have £2,700 taxable income and any earned income or pension income over £12,500 would indeed be taxed at 20% (unless you are Scottish resident for tax purposes).

 Thanks,  will redo my calculations with the £2,700 figure instead of £3,600 and see if I can get below the £12,500.  I had expected the personal allowance to have risen since the  2019/2020 tax year

Might be wishful thinking even next tax year given the recent government spending!!

Don't forget that if your earnings or pension income exceeds £12,500 any interest or dividends may well be taxed at the savings starter rate or dividend nil rate (both 0%).

molerat

If you did it last year have HMRC not allocated a tax code - they usually do ?

NedS

Dazed_and_C0nfused said:

vixen1500 said:

Dazed_and_C0nfused 

Then you will have £2,700 taxable income and any earned income or pension income over £12,500 would indeed be taxed at 20% (unless you are Scottish resident for tax purposes).

 Thanks,  will redo my calculations with the £2,700 figure instead of £3,600 and see if I can get below the £12,500.  I had expected the personal allowance to have risen since the  2019/2020 tax year

Might be wishful thinking even next tax year given the recent government spending!!

I believe it's already written in legislation that personal tax allowances will rise in line with CPI inflation from 2021/22 onwards, so unless parliament decide to change the legislation, next tax year's allowance should rise by 0.5% to £12,562

Dazed_and_C0nfused

NedS said:

Dazed_and_C0nfused said:

vixen1500 said:

Dazed_and_C0nfused 

Then you will have £2,700 taxable income and any earned income or pension income over £12,500 would indeed be taxed at 20% (unless you are Scottish resident for tax purposes).

 Thanks,  will redo my calculations with the £2,700 figure instead of £3,600 and see if I can get below the £12,500.  I had expected the personal allowance to have risen since the  2019/2020 tax year

Might be wishful thinking even next tax year given the recent government spending!!

I believe it's already written in legislation that personal tax allowances will rise in line with CPI inflation from 2021/22 onwards, so unless parliament decide to change the legislation, next tax year's allowance should rise by 0.5% to £12,562

Interesting, £1/month less tax, I won't spend it all at once!

where_are_we

Rob749 said:

The only problem so to speak, is that HL require you to leave £1000 in the account, otherwise they close it, not sure if that applies after 12 months though. You would then wait for the next tax year, do the same again, when you could draw the whole amount and still leave the £1000 there. Also if you do draw the whole amount, you will have to pay tax on £2700, which is the remainder after the tax free amount is deducted, this will leave you £3060 as a basic rate tax payer, a gain of £180 on your original contribution. I think that's how it works, I'm sure someone will correct me if I am wrong here. Alternatively find a pension provider that doesn't require £1000 in account to keep it open.

HL have changed their requirement on minimum funding to keep their SIPP open from £1000 to £50 - I presume this is after holding it for one year (I don`t  know the position in your first year). If you are aged 55 to 75, have no earned income you can contribute £2880 net per annum (grossed up to £3600 after about 6 weeks by HMRC) to your pension each tax year and then withdraw £3600 giving a basic rate tax payer about a 6% gain (much more if you are a non tax payer) - a good return on cash given the present low savings interest rates. We use a H-L SIPP and withdraw using a UFPLS once each tax year. As Jamesd posts, having a regular monthly saving DD will also guarantee keeping a H-L SIPP open - minimum £25 net a month. If you have a Halifax Reward current account and opted for the £5 monthly reward you can contribute £500 to your H-L SIPP by Debit card to qualify for that months reward.

molerat

Are you sure about the £50 as the latest Para A33 states (my bold)

Please note the following two paragraphs in this section A33 do not apply to the SIPP.
Where an Account belonging to you has a valuation of less than £250 and has been inactive for two years or more we reserve the right to close the Account and send you the balance, less any charges that are due.
If you reduce or give the instruction to reduce the level of cash or stock in your Account to a value below £50, we reserve the right to close your Account and send you the balance of the Account less any charges that are due. Any Loyalty Bonus will be paid in cash following Account closure.

D7 still states

If at any time you take a payment directly from a SIPP not in Drawdown which means less than £1000 will remain in the Account, we may, at our discretion, close the SIPP Account and pay out the full amount, less any applicable taxes and outstanding charges.

And E1

If you open a Flexible Drawdown Account after 5 April 2015, then if at any time you request a payment from the Flexible Drawdown Account which would result in the balance of your Flexible Drawdown Account falling below £1000, we may, at our discretion, close the Flexible Drawdown Account and pay out the full amount, less any applicable taxes and outstanding charges.

solar_power

Plain English Campaign where are you?

where_are_we

I took a UFPLS from my SIPP a few weeks ago and in the telephone process I asked HL how much I could take and still leave the SIPP in operation. They told me I had to leave at least £50 and when I explained their printed literature still had the old £1000 minimum requirement he said it hadn`t been updated yet. To be clear, I am talking about their SIPP and taking an annual UPFLS each tax year to benefit from the annual 6% uplift on a £2880 contribution - a UPFLS does not result in the SIPP going into flexi drawdown. I also have a  SIPP in drawdown which is separate to my SIPP. My OH also does the £2880 annual SIPP contribution and before calculating her UPFLS  she sent a secure message asking HL to confirm the £50 minimum funding requirement and they replied in the affirmative.

molerat

I quoted all the relevant terms as it pretty much covers all bases.