SIPP and Existing Pension

Heatherlea

Hi everyone. Hopefully, someone may be able to offer me some advice. I’m now aged 57 and approximately 20 years ago I was medically retired from the Civil Service with a pension due to ill health. I went back to work (not Civil Service) a few years later and worked full time until December 2016. At that time I decided to leave my job and take early retirement due to a change of job roll. My only income now is the Civil Service pension of £5,500 pa. My pay from my employment from April 2016 to when I left in December 2016 was just over £18,000.

Am I correct in assuming that I can save £14,400 in a SIPP in this current tax year and HMRC will add £3,600, totalling £18,000. Between me and my employer, about £300 has been contributed to my workplace pension in the current tax year, so I realise that £300 will have to be deducted from this amount.

My concern was reading this on the HL website “If you have accessed a pension since 6 April 2015, or had flexible drawdown before, a reduced money purchase annual allowance may also apply. This is set at £10,000 for the 2016/17 tax year and the government has proposed it will be reduced to £4,000 from the 2017/18 tax year.” I downloaded the guide, but am still none the wiser as to whether it applies to my Civil Service pension, so am now unsure whether I am limited to contributing £10,000 in this tax year.

Obviously, I want to benefit as much as possible by contributing the maximum allowed this tax year. In future years, I realise I will only be able to contribute the £2,880 as the Civil Service pension will be my only income.

Apologies if I’ve given too much information, but it a totally new language to me and have only recently started to take an interest in SIPPs.

Hopefully, someone here will be able to advise as to whether I am limited to £10,000 or I can contribute up to my earnings in this tax year.

kidmugsy

The civil service pension doesn't count for this purpose, being a Defined Benefit pension.

Before lashing out all that money I suggest you get HL's view. The people who answer the phone there tend to be very good.

Heatherlea

Thank you, I will give them a ring tomorrow.