Should I get a SIPP at age 56?

Give_me_the_money

Thanks kidmugsy ,

I will definitely look into what you suggested,regarding increasing pensions contributions for my wife.

Murmansk

OP here

I'm still wondering which might be the best provider to allow me open a SIPP containing Vanguard LifeStrategy if anyone can suggest someone suitable with low charges?

Thanks

ermine

Murmansk wrote: »

OP here

I'm still wondering which might be the best provider to allow me open a SIPP containing Vanguard LifeStrategy if anyone can suggest someone suitable with low charges?

Thanks

Some jobs you have to do yourself. But this table should help

The best provider depends on how much you want to save, how long you want to hold it for etc. To be honest it confuses the hell out of me why you want to keep investments in a SIPP. Run a HL SIPP in cash, couple of months before the end of the tax year whack a lump in, keep as cash, HMRC adds their bit, take out as cash (leaving the minimum cash in HL to keep it open) and rinse repeat next year. Take cash from the SIPP and whack this into your S&S ISA, buying VGLS to taste. Job done and now your VGLS is protected from the taxman.

If you want to featherbed your kids then there are arguments to be made for keeping the VGLS in a SIPP in which case HL aren't the cheapest, but otherwise in your situation the ISA seems to be the way to protect most of it from the taxman, using the SIPP to collect your bung as cash.

C_Mababejive

But it isnt really a 20% bonus is it because when you draw it out, you are subject to basic rate tax assuming you income is greater than the personal allowance ? So surely the real gain is anything you can make on the tax relief whilst it is invested ?

ermine

C_Mababejive wrote: »

But it isnt really a 20% bonus is it because when you draw it out, you are subject to basic rate tax assuming you income is greater than the personal allowance ? So surely the real gain is anything you can make on the tax relief whilst it is invested ?

But the OP states

I'm 56, getting £400 per month from the Local Government Pension Scheme, self-employed, unlikely to earn enough from that to pay tax this year.

so he has until 67 when he gets the SP to make sure earnings + £400*12=£4800+what he draws from the SIPP less TFLS is less than the personal allowance, so as long as he earns less than ~ £6700 he's golden.

Even if he pays 20% BR Tax on the entire amount the TFLS of 25% reduces the BR tax on the SIPP part by a worthwhile amount. But in that case he has to watch out, because draw any taxable amount from a DC pension he is limited to a max contribution of £4000 p.a. for life, so timing what he does gets important.

kidmugsy

ermine wrote: »

But in that case he has to watch out, because draw any taxable amount from a DC pension he is limited to a max contribution of £4000 p.a. for life, so timing what he does gets important.

Yeah, I should have warned him of that: thanks. That constrains him from next tax year onwards but the wheeze is still well worthwhile.