Being stupid or doing the right thing?

liketoknow

I am going to ask for an up to date statement of benefits and these are the questions so far that I am going to ask -

Is it defined benefit or defined contribution? If it's defined contribution does it have a guaranteed annuity rate or guaranteed minimum pension and what are the values and other terms of those? Is the value of the guaranteed benefits more than £30,000?


I've just looked on that calculator you have posted the link to and it seems that if I drew the 25% tax free income and put £5000 of it into a SIPP with HL, it would get tax relief of £1000, does that sound right? I realise that that TR wouldn't go in until a few weeks into May.
Can you open more than one SIPP and get two lots of tax relief, ie two £2880, although that would probably be above my earnings?

liketoknow

Also, if the TR doesn't go in until later in May, 2017/2018 tax year, would that mean I couln't draw some of it and do it again in that tax year?

xylophone

Be aware that a DB pension can have ( will almost certainly have) a GMP.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

Even when there are no relevant earnings, it is possible to pay £2880 into a RAS pension scheme and receive tax relief of £720.

This can be done each year up to age 75.

liketoknow

I also need to know what age it could be drawn as well don't I? Although as they told me a year or two back that I could have the 25% tax free lump sum, I presume I am of an age that applies to draw it.

xylophone

If a DB Scheme, it is perfectly possible that Normal Scheme Pension Age ( the point at which benefits could be drawn without actuarial reduction) was age 60.

liketoknow

xylophone wrote: »

Be aware that a DB pension can have ( will almost certainly have) a GMP.

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

Even when there are no relevant earnings, it is possible to pay £2880 into a RAS pension scheme and receive tax relief of £720.

So some questions to ask are: is it definited benefit or defined contribution? If it's definited contribution does it have a guaranteed annuity rate or guaranteed minimum pension and what are the values and other terms of those? Is the value of the guaranteed benefits more than £30,000?

This can be done each year up to age 75.

If it is possible time wise though to get the 25% tax free lump sum and open a SIPP, can I put more in than £2800, say up to £5000? I know the tax relief wouldn't go in until May but would that count as 2016/2017 or 2017/2018, in other words could I do it again in 2017/18?

liketoknow

It is a bit awkward as the new management don't take over until April 1st, so very little time this year.

xylophone

If you want to make pension contributions in this tax year you need to do it before 5 April.

As previously explained, this can be up to net relevant earnings.

The tax relief received on the 16-17 year relates to that year's contributions even though received later.

You can make another contribution up to net relevant earnings (or £2880 if less) in 2017-18 and receive tax relief.

liketoknow

xylophone - I have read the info in the above link regarding GMP - thank you.
It has gone over my head a little bit, but from what I can gather, because my leaving date was before April 1988 (I left around 1983), my pot should have increased by around 8.5% a year, which to me sounds good.
It receives another increase on April 6th.
This is all supposing it is a GMP of course.
If I have understood it properly, I would be better to leave it all in until after April 6th, then draw out my 25% tax free to open the HL SIPP.
I think I have to then have a weekly/monthly payment if it stays where it is, so I could defer my SP and take that instead, I think I read somewhere that that increases by 10%whilst deferred?
Would I be right in thinking whatever is left in the GMP will still increase by another 8.5% the following April.
Also, will this only be paid for the 5 years as the leaflet on death benefit said -
'The pension guarantee period runs for 5 years' ?

Sorry to keep bombarding you with questions!!

liketoknow

xylophone wrote: »

If you want to make pension contributions in this tax year you need to do it before 5 April.

As previously explained, this can be up to net relevant earnings.

The tax relief received on the 16-17 year relates to that year's contributions even though received later.

You can make another contribution up to net relevant earnings (or £2880 if less) in 2017-18 and receive tax relief.

As the official take over date is April 1st, which is Saturday, the next working day is Monday 3rd so I think it will probably be too late to bother with this year anyway so I think I am going to have to forget about this tax year.
I have not got my books up to date for 2016-2017 anyway so not sure what my earnings will be, although I could finish them off in time as I know no more will come in now. My earnings will probably be more this year than I am expected to earn next year.
I take it the pension payments will not be counted as relevant earnings in respect of paying into a SIPP?
I think its highly unlikely that I would want to pay in more than £5000 from my Tax free lump sum anyway though as I have some debts I want to pay off. An extra £1000 TR will come in handy for that.
Can the contribution for the following year be paid in over the year, ie, so much a week/month, I'm sure you or jamesd mentioned it in another post?