SIPP Help needed Please

clingingtothewreckage

Hello

I have read numerous posts on using SIPPs but I would be grateful for comments on my proposal to make sure I do understand the system and I am on the right track.

I finished work August 2016 following ill health and have been living on CB ESA and savings. (Not ill health retirement). Unless I am placed in the support group my ESA will finish shortly.

P45 details TP 7049.00, TT 387.00 Tax Code 1021L

LGP could be taken May 2017 (with some tapering 80 year rule protection)
SP 2024

I am thinking I can open a SIPP this tax year with 5,600 and in April add 2880. The Governments contributions will take this to 10,600 which I would draw out as I am likely to be a non-tax payer. As soon as I draw my LGP I will be paying tax at the basic rate.

Does this sound reasonable or have I missed something?
Comments, advice etc would be appreciated

Thank you

kidmugsy

clingingtothewreckage wrote: »

LGP could be taken May 2017 ...

I am thinking I can open a SIPP this tax year with 5,600 and in April add 2880. The Governments contributions will take this to 10,600 which I would draw out as I am likely to be a non-tax payer. As soon as I draw my LGP I will be paying tax at the basic rate.

If you expect not to be a taxpayer in 17/18 when do you intend to start drawing your LGP?

OldBeanz

You will have paid into the LGPS presumably so will need to deduct those contributions before working out the maximum contribution which wil draw tax relief otherwise good to go.

xylophone

Do you mean that you will draw on the SIPP to avoid taking your LGPS until tax year 18-19?

Have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension

clingingtothewreckage

Thanks for your replies.

Kidmugsy - I can start my LGP in May 2018, 2017 was a typo. Sorry for that. I understand that to avoid paying additional tax I need to have closed the SIPP by the beginning of April 2018.

OldBeanz - My pension contribution to the LGPS was 6.5% of 7049 - 458.00. Sorry having a mental block. Do I work backwards and pay in a figure that pays 458 less than my original proposal?

Xylophone - yes I am trying to add a bit more money to the pot via the SIPP to take me to my LGP in May 2018.
Last year my new state pension estimate was for £123.03 based on 42 qualifying years and a COPE of £71.96 = £194.99 week, payable 2024.

Thank you