Opening a SIPP when over 55

Audaxer

I'm over 55 and retired and think it might be worthwhile me opening a SIPP even although I can only contribute up to £3,600 gross per annum. Reading through the HL Key Features it says that on opening a SIPP you have to select a retirement age when you apply. If over 55 can you just select your current age, so you have the option to take income at any time (even although I probably wouldn't be taking any lump sums in the immediate future)? In other words if you are over 55 can a SIPP be as flexible as an ISA, especially if the provider doesn't charge for withdrawing lump sums?

Nitram29

I don't see why not, if you are over 55 you can access a SIPP so it kinda acts like an ISA in that sense. I don't think it matters what age you put in for a SIPP, some of the lifestyle profiles on stakeholders start moving from equities to income and bonds as you near retirement so knowing a target retirement age is needed for that but the pension starts when you want it to.

One thing to watch out for is government changes in policies and legislation but there are no impediments I can think of to doing what you suggest.

AnotherJoe

Yep, a free £720 a year potentially. No brainer.

Stubod

..I have fairly recently opened a SIPP, (over 55 and retired). Only question I have is that although you get "free money" in the form of tax at 20%, if you earn over the threshold (£11.5k), then you end up paying most of the "tax allowance" back in tax?....

Audaxer

Stubod wrote: »

..I have fairly recently opened a SIPP, (over 55 and retired). Only question I have is that although you get "free money" in the form of tax at 20%, if you earn over the threshold (£11.5k), then you end up paying most of the "tax allowance" back in tax?....

This tax year I am probably going to be well within the personal tax threshold, but next year I won't be. So I think in theory I could possibly withdraw most of it (with just enough left in to leave the account open) before April, and not be taxed or be able to claim it back, but not sure whether that's within the rules?

Mnd

Just put 66..it doesn't tie you to anything

AnotherJoe

Stubod wrote: »

..I have fairly recently opened a SIPP, (over 55 and retired). Only question I have is that although you get "free money" in the form of tax at 20%, if you earn over the threshold (£11.5k), then you end up paying most of the "tax allowance" back in tax?....

Yes, you'd get 25% back, so £180. Still not to be sniffed at for two minutes effort.

Alexland

Just make sure you consider any drawdown fees.