Paying £2880 into pension when retired

masca

I'm continuing to be dense, and hence I'm back with another question!! I opted for the online drawdown in the end (what a very loooong process this is turning out to be!!) and I've withdrawn and received the tax free element and am now withdrawing the remainder. I wish to leave the account open for the 2026-27 contribution and so I've left £50 (plus some odd change) in the SIPP account. Is this correct? Can I now withdraw AND CLOSE the SIPP Income Drawdown account, or have I left the £50 in the wrong place? Thank you - again!

masca

Bump.... 😊. TIA!

SVaz

Why would you need to close the drawdown account? Not sure you can do that anyway, it will just stay empty ( unless you have any dividends/ interest to go in) until you come to use it again once you draw whatever’s built up in the Sipp account.

Nebulous2

https://forums.moneysavingexpert.com/discussion/comment/81876665#Comment_81876665

In my experience HL doesn't do that - if the drawdown account goes under £50 they pay it out and close it. I assume they would simply open a new one later, if you put more money into drawdown.

masca

Just incase anyone ends up here in the future with the same query...

HL have confirmed by secure message that both the original HL SIPP and the HL SIPP Drawdown account need a minimum balance of £50 to remain open. However, they've also confirmed that it's very straightforward for them to reopen either account if required for a further contribution or to move more of the SIPP into Drawdown.

Willow1983

Hi, I have a query regarding putting £2880 into a sipp. I don’t have any income as living off husband’s pension and savings and was thinking of opening a sipp and putting the money in from savings to get the tax relief. Would I be taxed on it when I withdraw the money? Not sure if it is more bother than it’s worth. Thanks in advance. Willow

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81972574#Comment_81972574

75% of the gross contribution, so £2,700, would be taxable income when you take it out of the SIPP.

But any tax payable will depend on the other taxable income (and types of income) you have in that tax year(s).

It's not all that unusual to get tax relief on the way in and pay no tax on the way out.

where_are_we

https://forums.moneysavingexpert.com/discussion/comment/81972574#Comment_81972574

For us it was well worth the bother. However read up on methods used. Initially it will seem like a lot of work but once set up you can benefit greatly if you keep your income including withdrawals from a Sipp (which will be tax free) to less than £12570. You have to be between 55 (soon to become 57 in April 2028) and 75. My OH benefited years ago and used Hargreaves Lansdown - they were very helpful - remember to keep £50 in their Sipp. We used annual UFPLS withdrawals but you will have to claim tax back. There will be a 6-8 week gap before HMRC add the £720 tax relief and then you can make a £3550 withdrawal . Do this annually. Remember your tax position will probably change once you start receiving State Pension and you might lose the tax free advantage but until then you are annually gaining £720 on a £2880 outlay.

molerat

We used annual UFPLS withdrawals but you will have to claim tax back.

Only if you don't know how to work the system. Been doing it for quite a few years now and never had to reclaim any tax.

Asimovs_nightfall

https://forums.moneysavingexpert.com/discussion/comment/81973110#Comment_81973110

What does this mean knowing how 'to work the system'? Not only do I feel like I'm in an episode of The Wire, I'm full on FOMO!