pension recycle clarification

[Deleted User]

Hello again all,
I am looking for clarity and assistance re the following situation.
1. Employer defined benefit scheme stopped 1st Jan and replaced with defined contribution scheme.
2. I have accessed the defined benefit pension payable from Jan and joined the new defined contribution scheme.
3. I am retiring from the company Jan 31st.
4. I hoped to make large payment into new DC scheme, however the new DC scheme does not accept lump sum payments.
5.Is it possible/legal for me to open a sipp, whilst still in employment, and pay a sum into it from DB tfls?
6. I have searched on the net and have spoken to a few of the well known fund platform providers ( H-L , Cavendish etc) but have yet to receive a definitive answer.
7. I am male age 60. Thanks,, Bill

xylophone

http://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/recycling-of-tax-free-cash/

And have you obtained a new state pension statement?

https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY

See http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

[Deleted User]

xylophone,
Thanks for taking the time to post several links. My interest at this time is to resolve the issue re SIPP contribution. I have read your Royal London link and it again is not perfectly clear. Not to someone with little knowledge of the subject like myself. I have read other articles on the topic and they appear to state that defined benefit lump sums are ok for SIPP contribution, hence my query.
Thanks, Bill

[Deleted User]

AnotherJoe,
Thanks for reply.I have my up to date numbers re unused tax allowance.(£60k, including carry forward). Will I be limited to contribute to the amount of my salary? (if I can contribute). I have joined the new scheme to qualify for the death in service benefit until I retire on the 31st.
Thanks, Bill

Linton

rangersfc wrote: »

AnotherJoe,
Thanks for reply.I have my up to date numbers re unused tax allowance.(£60k, including carry forward). Will I be limited to contribute to the amount of my salary? (if I can contribute). I have joined the new scheme to qualify for the death in service benefit until I retire on the 31st.
Thanks, Bill

You cannot contribute more to a pension than your gross earnings from employment in any one tax year. Carry forward doesnt apply to this limit. Carry forward for up to 3 years does apply to the completely separate £40K limit for all contributions to your pension ie both yours and your employers.

[Deleted User]

Linton,
Salary £36 per annum. Are you of the opinion that I can open SIPP and make contribution from DB lump sum? If so , what max amount.
Thanks,, Bill

Linton

rangersfc wrote: »

Linton,
Salary £36 per annum. Are you of the opinion that I can open SIPP and make contribution from DB lump sum? If so , what max amount.
Thanks,, Bill

I am of the opinion that you can put your DB lump sum into a SIPP, but the situation seems far from clear. It's just an opinion as I havent seen any clear evidence.

As to the amount - it doesnt matter where the money comes from, you are still constrained by the gross earnings and £40K limits.

xylophone

With regard to recycling of PCLS, I don't see how HL (or anybody else) can tell you more than the RL link - here is the 2016 version from Prudential

http://www.pruadviser.co.uk/content/knowledge/technical-centre/flexi_access_drawdown_recycling/



With regard to HL, they produce their own fact sheet (google Pension Recycling - Hargreaves Lansdown)

It seems to me that you are given the HMRC rules/guidance and then left to make up your own mind as to whether your proposals fit within the rules.

HL also produce detailed guidance on carry forward

http://www.hl.co.uk/pensions/interactive-calculators/carry-forward-annual-allowance-calculator

[Deleted User]

Linton,
Thanks for your input.
Bill

[Deleted User]

xylophone,
The examples you gave seem to refer to DC schemes being used to recycle into SIPP. No mention of final salary DB schemes.
Thanks
Bill

xylophone

A PCLS is a PCLS whatever kind of scheme it comes from?