Paying £2880 into pension when retired

Xbigman

Well I've opened my HL SIPP and funded it ok but I have a question. In the initial confirmation email it said I should nominate a bank account. When I try it says I don't have a qualifying account. Do I not need to nominate a bank account to withdraw from a SIPP? I know I have to get an illustration and its not a straightforward withdrawal but surely I need to give my bank details somewhere.

Darren

threlkeld53

Xbigman said:

Well I've opened my HL SIPP and funded it ok but I have a question. In the initial confirmation email it said I should nominate a bank account. When I try it says I don't have a qualifying account. Do I not need to nominate a bank account to withdraw from a SIPP? I know I have to get an illustration and its not a straightforward withdrawal but surely I need to give my bank details somewhere.

Darren

Give HL a ring and quote them your account number. Their customer service is very good. Tell them you want to set up the nominated bank account. They will guide you through a few simple 'yes or no' questions over the phone. Once done, they'll send you by post the illustration pack.
Complete the pack by hand, somewhere on it you'll be asked to include your nominated bank account details. Post it back to them and they will confirm by email within 5 to 10 days that your process is complete. Then you should be able to request withdrawals should you so wish.

molerat

I believe the welcome e-mail is a bit generic for a range of products. Normal way to nominate a bank account for the SIPP is during the first UFPLS withdrawal process you fill in the details on the form and include a recent in the post bank statement and a copy of your birth certificate and marriage certificate if female.  Only needs doing once.

Xbigman

OK, that makes sense. I'm not withdrawing anything until the new tax year so there's no rush. 


Darren

colsten

Apologies if this kind of question has already been covered in the previous 114 pages but I hope someone will be kind enough to help me answer my questions from a friend.

Background

• he is retired, past state pension age now at 67
• since 2010, his only taxable income is unearned (DB pensions, state pension, savings)
• he has been a HR tax payer since retiring and is expecting to remain HR (income is well over the HR threshold)
• he has a small SIPP into which he paid £2,880 annually between 2010-11 and 2015-16
• he has not yet started drawing from that SIPP, and has no needs or plans to do so before he gets to 75
• he is doing annual Self Assessments

Questions

1. can he still make use of the carry forward allowances and pay £2,880 into the SIPP for the last 3 tax years, alongside the £2,880 for the current tax year, before April 5 2021? I.e. back to and including 2017-18?
   
   
2. will he be able to claim the HR tax relief for those 4 years in his Self Assessment for 2020-21?
   
   
3. would there be any compelling argument for withdrawing those contributions rather than investing them?
   
   
4. anything else he should consider?

Thanks for your collected wisdom, as always!

Dazed_and_C0nfused

colsten said:

Apologies if this kind of question has already been covered in the previous 114 pages but I hope someone will be kind enough to help me answer my questions from a friend.

Background

• he is retired, past state pension age now at 67
• since 2010, his only taxable income is unearned (pensions, savings)
• he has been a HR tax payer since retiring and is expecting to remain HR (income is well over the HR threshold)
• he has a small SIPP into which he paid £2,880 annually between 2010-11 and 2015-16
• he has not yet started drawing from that SIPP, and has no needs or plans to do so before he gets to 75
• he is doing annual Self Assessments

Questions

1. can he still make use of the carry forward allowances and pay £2,880 into the SIPP for the last 3 tax years, alongside the £2,880 for the current tax year, before April 5 2021? I.e. back to and including 2017-18?
   
   
2. will he be able to claim the HR tax relief for those 4 years in his Self Assessment for 2020-21?
   
   
3. would there be any compelling argument for withdrawing those contributions rather than investing them?
   
   
4. anything else he should consider?

Thanks for your collected wisdom, as always!

1.  No.  He cannot contribute more than the non earners limit of £2,880 (£3,600 with the basic rate relief added)
2.  No. 
NB. Tax relief on pension contributions is only ever allowed against income of the same tax year as the contribution was paid in.

wannaretireearly

Hi, as there are 115 pages to this thread I'm thinking there are many knowledgeable people here who could answer my queries about a SIPP!!  Apologies if asked already but as we're fast approaching the end of the tax year I don't have time to read through all the thread. Basically, I'm looking for advice about putting in a SIPP for the first time. I was thinking of putting the money into a H&L SIPP just as a holding balance until I know enough about how/if to invest as it won't be a massive amount. I am assuming if I do this tomorrow it will qualify for this tax year and I will get the 25% tax element added by HMRC. I only work small part time hours and my taxable pay for 2020/21 is 8180.47. Can I invest this all and if not how do i calculate what i can pay in? I am currently 52 and plan to stop work at 55. My only personal income will come from jointly renting a property out, so my plan is to pay as much as i earn into a SIPP for 3 years then draw it from 55-60 to maximise my personal allowance ( I have a pension that kicks in at 60 which with the rental income will probably cover my personal allowance) . I understand that if I stop work at 55 I can still invest into a SIPP but it will be restricted to £2880 as a non-earner. I am only looking at doing this to maximise my income from 55 and in my eyes it is a far better return than leaving money in the bank atm. Any advice gratefully received. Many thanks for looking

zagfles

wannaretireearly said:

Hi, as there are 115 pages to this thread I'm thinking there are many knowledgeable people here who could answer my queries about a SIPP!!  Apologies if asked already but as we're fast approaching the end of the tax year I don't have time to read through all the thread. Basically, I'm looking for advice about putting in a SIPP for the first time. I was thinking of putting the money into a H&L SIPP just as a holding balance until I know enough about how/if to invest as it won't be a massive amount. I am assuming if I do this tomorrow it will qualify for this tax year and I will get the 25% tax element added by HMRC. I only work small part time hours and my taxable pay for 2020/21 is 8180.47. Can I invest this all and if not how do i calculate what i can pay in? I am currently 52 and plan to stop work at 55. My only personal income will come from jointly renting a property out, so my plan is to pay as much as i earn into a SIPP for 3 years then draw it from 55-60 to maximise my personal allowance ( I have a pension that kicks in at 60 which with the rental income will probably cover my personal allowance) . I understand that if I stop work at 55 I can still invest into a SIPP but it will be restricted to £2880 as a non-earner. I am only looking at doing this to maximise my income from 55 and in my eyes it is a far better return than leaving money in the bank atm. Any advice gratefully received. Many thanks for looking

You can get tax relief on £8180.47 gross, ie £6544 net. So you can pay in £6544 to a SIPP and they'll top it up to £8180 with tax relief. That assumes you're not paying into a RAS workplace scheme eg a group pension plan, ie one that claims tax relief in the scheme, if you are you'll need to take off the gross contributions you're paying into that (don't worry about employer contributions).

dunstonh

I only work small part time hours and my taxable pay for 2020/21 is 8180.47. Can I invest this all and if not how do i calculate what i can pay in?

You can pay 100% of your gross earned income into a pension (or pensions in case there is an active workplace scheme).

So, if your earnings are £8180.47 gross then you can pay £8180.47 gross into a pension.

wannaretireearly

Zagfels, I pay 5.5% of my gross wage into LGPS. I earned £8656.57 but my payslip shows the taxable amount quoted which i assumed would be the maximum I could pay in. For future reference if i divide the taxable amount by 125 x 100 that should give me the net figure i can pay in .... to get the gross amount in total after HMRC add 25% to it?
Thank you for replying. 
..... Just opened the H & L SIPP, it was so easy to do!