Paying £2880 into pension when retired

vixen1500

Apologies if this has already been asked/answered

Just found this thread by accident and been reading through. It would appear HL is the most popular to used.

But how do you choose who or what to invest in? Just been reading HL booklet sounds as if you can just leave it as cash, makes sense if you are going to withdraw all but £1000

As I understand it I can pay in this tax year, get a free top up. Leave in £1000 to avoid charges. Pay in again just before end of next tax year, get a top up. Withdraw,
And continue to do this yearly.

Is this right or have I misunderstood.?

Dazed_and_confused

You can leave it in cash if you want.

But you are then effectively losing money due to inflation. So it would be extremely low risk in the sense that your pension pot wouldn't go down in monetary value. But it would lose value in real terms because of inflation

Tiger_Moth

From my experience, making a personal pension contribution does indeed reduce your household income for the purposes of the student maintenance loan. The relevant date is in which tax year you make the net contribution, not when you receive the tax relief.
Hope this helps

Aiki

Thanks everybody for this thread. HL SIPP opened with ease, it is clear what the tax relief will be and HL will arrange for it to be applied for. Looking forward to see how this progresses. Nice to way to save a bit more.

vixen1500

Aiki wrote: »

Thanks everybody for this thread. HL SIPP opened with ease, it is clear what the tax relief will be and HL will arrange for it to be applied for. Looking forward to see how this progresses. Nice to way to save a bit more.

Just looking into this myself, did you have to choose what to invest in?

Thanks

Aiki

Hi Vixen1500,
In HL SIPP if you leave it in cash there (appears to be) is no charge, even a 0.1% interest. I will be 55 in the next tax year so I will withdraw (most of) the money to fully realise my £720 tax relief to either live on or reinvest in my ISA with HL where the charges for shares are capped at a lower value than in a SIPP.

I have not looked in detail since that was not my intention to invest, but the range of investment opportunities in the SIPP are vast, but like all these platforms it is the management costs that need to be looked at closely so that gains are not eroded away.

vixen1500

Aiki wrote: »

Hi Vixen1500,
In HL SIPP if you leave it in cash there (appears to be) is no charge, even a 0.1% interest. I will be 55 in the next tax year so I will withdraw (most of) the money to fully realise my £720 tax relief to either live on or reinvest in my ISA with HL where the charges for shares are capped at a lower value than in a SIPP.

I have not looked in detail since that was not my intention to invest, but the range of investment opportunities in the SIPP are vast, but like all these platforms it is the management costs that need to be looked at closely so that gains are not eroded away.

I have no pension other than my old age pension which I should get at 66/7 depending on what the womens pension age is.

So thought this might be worth looking into, but know nothing about shares or investments

Are you planning to pay into in the following tax years?

Aiki

Hi Vixen1500
I am not sure what I will do for the other tax years yet since the main benefit of this for me comes from not taking the total income recieved from all taxable incomes over the personal tax allowance. It is a balancing act between DB and DC pensions and savings. If you end up paying tax from the arrangement of paying this £2880 then the overall benefit drops to somewhere between the maximum of £720 and the minimum benefit of £180. The early debates in this very long thread cover the main points of the pro's and con's of this benefit. Good luck

gocat

ok I have been trying to get my head around this but seem to be failing.
I have £3600 in cash in HL. I dont earn enough to pay tax. So can I withdraw all the £3600 and not pay tax (this amount still wouldnt take me over the tax allowance).
Also, when I click "deal" on my account it mentions a "nominated bank account" is this something we did when we set up the account. When I try to click on "withdraw money" it doesnt let me click on it and when I click on "nominated bank account" it says Nominated bank account for withdrawals and income
To amend the bank account details for your Vantage SIPP / Vantage SIPP Income Drawdown Account, please download a change to bank account details form and return it to us at our freepost address shown on the form.
So getting all confused with this.
Will there be charges if I withdraw the whole amount.
Can I put in £2880 in the next tax year and get it topped up by £720

tia for any answers.

drphila

gocat wrote: »

Will there be charges if I withdraw the whole amount.
.

There is a punitive charge of £295 + vat if you open a SIPP and then withdraw the lot when the tax relief arrives.


See the previous page for further discussion.