Paying £2880 into pension when retired

where_are_we

Depending on which pension provider you use, you may have to leave more than £100 (we use HL and leave a minimum £1000 in the Sipp to avoid charges) in the account each year.

Vortigern

s4mmy wrote: »

This would be ok to repeat each year until I receive my state pension.

No need to stop when you receive the state pension. Keep repeating until you're 75.

Dazed_and_confused

But if you receive anywhere like a half decent state pension then the taxable amounts you withdraw are likely to be taxed in full rather than untaxed as you would no longer have any spare personal allowance left once your state pension kicks in

AnotherJoe

Dazed_and_confused wrote: »

But if you receive anywhere like a half decent state pension then the taxable amounts you withdraw are likely to be taxed in full rather than untaxed as you would no longer have any spare personal allowance left once your state pension kicks in

That still works ou, IIRC, as a free £180.

jamesd

The gain is still there, just at the lower £180 a year level. Since state pension deferral often makes sense the full gain can last longer than you might expect. The taxable portion is £2,700a year and you can also defer once after claiming the state pension. So you could pay in for three years and defer for one year in which you take out the money for the three years and the fourth in deferral. 4 * 2700 = 10800. With an £11,500 personal allowance in 2017-18 paying in for four years and deferring for the fifth would also make most of the money tax free.

Since that takes you to around age seventy even if you didn't defer initially by not claiming it's getting quite close to the age 74 last year for paying in with tax relief. Deferring as late as age 75 can still make sense as longevity insurance for those in normal good health.

This is assuming little other taxable income other than interest. The higher the other income which uses the personal allowance is, the fewer the number of years you can accumulate before the deferral one.

stoozie1

Could anyone please summarise which of the SIPP providers is cheapest to do this with if only depositing £2880, waiting for the tax relief and then withdrawing as cash?

hogweed

Ummm... unless I've been very naive, HL charged me nothing - though they will if you clean it out again in the first year I believe.

nxdmsandkaskdjaqd

stoozie1 wrote: »

Could anyone please summarise which of the SIPP providers is cheapest to do this with if only depositing £2880, waiting for the tax relief and then withdrawing as cash?

If you leave the deposit as cash on the account there are no Platform charges.

You do however have to leave £1000 on account to prevent a Closure Fee.

stoozie1

thank you. My parents are considering doing this, but not sure which platform to point them to. Currently HL are winning I think. Mostly because my dad is on their mailing list!

tempus_fugit

Hi all. Been reading this thread and it looks like I (and possibly my wife) should really be doing this as we are retired, living off savings and not currently working until pensions kick in in a few years time. My question is (and be gentle on me if this seems obvious), am I too late to do this for the current tax year (it mentions above about doing it just after the tax year begins)? Would I be able to do this now, withdraw some of the funds in a few weeks time once the tax relief has been added and then repeat at the start of the next tax year? Also, would taking TFLS from another pension meantime affect this adversely?