Paying £2880 into pension when retired

missile

You do not really need to keep £1000 in the account. Charge is only levied if you close the account within 12 months.
See here > https://forums.moneysavingexpert.com/showpost.php?p=71859878&postcount=14

drumtochty

missile wrote: »

You do not really need to keep £1000 in the account. Charge is only levied if you close the account within 12 months.


Not true as I have just phoned HL and after checking with a Supervisor the agent advised..


If you have £1,400 in your non crystalised SIPP and you move that to drawdown, at that point you apply to remove £500, HL will advise you that as after this proposed transaction there is less than £1,000 in your drawdown account, they will pay out the complete balance of the SIPP.


If your SIPP has been open for less than 1 year, they will reduce the payment by approx £295 plus VAT, if your account has been open for more than one year, they will reduce the payment to you of the balance of the account by £25 or so plus VAT.


In both these cases the SIPP is closed.

missile

Of course you will be charged when you close the account within 1 year, this has been highlighted many times.

You have not read my post / are not following the recommendation as made by jamesd. I can confirm I did and have not been charged.

See here > https://forums.moneysavingexpert.com/showpost.php?p=71859878&postcount=14

Sparkiemalarkie, you might want to wait until 31/01/19?

first payment into the sipp was 30/01/18

AnotherJoe

sparkiemalarkie wrote: »

Hi I could do with a bit of help please.
I have £2000 left in my HL drawdown and have just contributed another £2880 for this tax year.
I still have £1700 of my personal tax allowance left for this year.
I know that I need to keep £1000 in my account for 1 year to avoid fees...
Can the new £2880 count towards the £1000 or does it have to be the initial payment?
I was looking to take out another £1600 to use up my pa.
Just noticed that my first payment into the sipp was 30/01/18
and drawdown was 07/08/18
tia
sparkie

The money in the account isn't flagged with its origin .
All that matters is what's left when you withdraw money.

Mnd

HL kept my SIPP open when I made a transfer to drawdown that took my SIPP balance to less than £1k as I "saved" part of my 2880 to pay as a monthly direct debit

drumtochty

missile wrote: »

Of course you will be charged when you close the account within 1 year, this has been highlighted many times.

You have not read my post / are not following the recommendation as made by jamesd. I can confirm I did and have not been charged.

[FONT=&quot]Sorry "missle" this is selective reading on your part.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Yes, James previously on another thread intimated that HL """""may well"""" not close a SIPP with less than £1,000 balance in it, he did not say they ""would not"" close a SIPP with less than £1,000 balance in it. I did read that thread as I do all of his threads that I come across.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Now read my post again, I quoted the two cases that HL quoted me as worked examples in each case they advised that the SIPP / Drawdown Account would be closed if the balance of the SIPP / Drawdown Account went below £1,000, the only difference was the value of the closure fee of £295/ £25 re less than a year open / more than a year open.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If someone has left money non-crystallised in the SIPP side of the account that keeps the combined balance above £1,000, that is a different matter.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]You appear to not want to read the advice they gave, that a they will still close the SIPP / drawdown account that has been open for more than a year, if the combined balance goes below goes below £1,000.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]At first the agent suggested that they would not close the account if the balance went below £1,000 and then charge a closure fee.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I pushed him on this point and he said, "I will talk to others on the team and phone you back".[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]He then phoned back after 5 minutes and apologised that the information he gave me was incorrect.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]He was not sure 100% if the online system gives you a warning when you request a payment that reduces the balance to below £1,000 or if the HL staff will contact you with a warning that the account will be closed with a closure fee charged and you will receive the balance of your account less the closure fee.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Now if you disagree with what HL have advised please take that up with them, or if you are saying that you in the past “got away” with it, that is in the past![/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]HL now advise account holders that a £1,000 balance is required in the combined account to stop closure.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]I will be leave a £1,000 balance in the account, that I do the annual £2,880/£3600, deposit / withdrawal in.
[/FONT]

missile

drumtochty wrote: »

[FONT=&quot]Sorry "missle" this is selective reading on your part.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Yes, James previously on another thread intimated that HL """""may well"""" not close a SIPP with less than £1,000 balance in it, he did not say they ""would not"" close a SIPP with less than £1,000 balance in it. I did read that thread as I do all of his threads that I come across.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Now read my post again, I quoted the two cases that HL quoted me as worked examples in each case they advised that the SIPP / Drawdown Account would be closed if the balance of the SIPP / Drawdown Account went below £1,000, the only difference was the value of the closure fee of £295/ £25 re less than a year open / more than a year open.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If someone has left money non-crystallised in the SIPP side of the account that keeps the combined balance above £1,000, that is a different matter.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]You appear to not want to read the advice they gave, that a they will still close the SIPP / drawdown account that has been open for more than a year, if the combined balance goes below goes below £1,000.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]At first the agent suggested that they would not close the account if the balance went below £1,000 and then charge a closure fee.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I pushed him on this point and he said, "I will talk to others on the team and phone you back".[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]He then phoned back after 5 minutes and apologised that the information he gave me was incorrect.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]He was not sure 100% if the online system gives you a warning when you request a payment that reduces the balance to below £1,000 or if the HL staff will contact you with a warning that the account will be closed with a closure fee charged and you will receive the balance of your account less the closure fee.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Now if you disagree with what HL have advised please take that up with them, or if you are saying that you in the past “got away” with it, that is in the past![/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]HL now advise account holders that a £1,000 balance is required in the combined account to stop closure.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]I will be leave a £1,000 balance in the account, that I do the annual £2,880/£3600, deposit / withdrawal in.
[/FONT]

It was my question that jamesd responded to on that post

James previously on another thread intimated that HL """""may well"""" not close a SIPP with less than £1,000 balance in it, he did not say they ""would not"" close a SIPP with less than £1,000 balance in it.

I can confirm that HL did not close my account when balance fell below £1,000 that year. They did not close it the next year or this year <LOL> I would urge others to follow HIS advice. :p:p

jamesd

drumtochty, HL advised the same when I originally wrote about this. It's one of the cases where there is a difference between what their conditions permit them to do and what they actually do and since that is at their discretion it's subject to change. Best to think of the initial description you got as accurately describing current reality and the call back as what can be done.

Missile and others have experienced the reality but HL are allowed to change that.

For those using HL it's perhaps best described as wise not to allow balances to ever go below £1,000.

You shouldn't expect HL to close an uncrystallised account that has an active direct debit funding it, in part because they would then end up opening a new account the next month.

Similarly, I doubt that they could be considered to be treating a customer taking monthly income fairly if they closed the account as soon as the balance went below £1,000.

In general my preference with HL after the first year is to have monthly funding direct debits and monthly income payments operating, with the tax free lump sum taken as extra. While missile has described current reality a cautious person might want to maintain balances above £1,000 at all times and if you want a relaxed life that's the way to go.

You're both right, just looking at it from different directions, one "can do" and the other "actually do".

It's also worth considering that I originally chose to mention HL because they are popular here and Virgin because I wanted an alternative well known name without charges. Nothing sacrosanct about them and it would be great if anyone finds better or just alternative provider options and writes about them here as well.

stulaunch

Hi, I'm 55, self employed and thinking of doing this for other reasons.

My son is at Uni and want to bring my income down this tax year, ending March 31,2019, as much as possible, so that he gets more in the way of maintenance grant.

I think I can put in around £3000.
I wouldn't want to take anything out, hopefully.

When do you think the tax relief would be added to that? And if it wasn't added by March 31st would I still be entitled to include it to my Pension contributions when filling in my self assessment for this year?

Also, if I needed to take money out of the cash held in a Sipp, Would I be able to take 25% tax free, even though I'm still earning?

Thanks

Dazed_and_confused

My son is at Uni and want to bring my income down this tax year, ending March 31,2019, as much as possible, so that he gets more in the way of maintenance grant.

Are you absolutely certain making this payment would achieve that? It doesn't reduce your income for tax purposes. Does it for maintenance grant purposes?

When do you think the tax relief would be added

Depends on the provider, some are immediate.

And if it wasn't added by March 31st would I still be entitled to include it to my Pension contributions when filling in my self assessment for this year?

Yes. It is the year you make your payment in which is important.

But it won't alter your income for tax purposes. It does (the gross amount) increase the amount of basic rate tax you can pay. Which can reduce the amount of higher rate tax payable.
More complicated if you are Scottish resident for tax purposes.