Tax relief for non-taxpayers

Billybogle

I'm 57 and no longer able to work. Currently my annual taxable income is between 7k and 8k, made up of contributary ESA, a small annuity and savings interest. I'm entitled to the Blind Person's tax allowance, so that makes my tax-free personal allowance something over 13k, leaving loads to spare.

I also have a deferred local government pension, which I can start drawing from any age from 60 to 65.

I read that non tax payers can pay up to £3,600 a year gross into a personal pension, only having to pay 2,880 net.

Is it not correct that as I'm over 55 I can take out my pension money at any time, so if I wished could I not just open a SIPP, pay in £2,880 one day and take out £3,600 the next day? Am I missing something, as it all seems a bit too good to be true.

Also, could I do the same for the previous 3 years and, if so, how would I go about it?

What's the catch in all of this.

AnotherJoe

No catch. Just don't take it all out in year one, closing the SIPP because you will likely be charged for that.
So, open a SIPP, pay in the £2880, then take some out but leave whatever is the minimum amount (with HL it's £1,000 I believe) and do the same the next year, gaining £720 each year. You can't claim back for previous years I think but you can make two contributions in short order, say one now and one after April 5th.