Looking to open my first SIPP > Thoughts Please...

ValiantSon

scoot65 wrote: »

Thanks again for your input.


The problem I have is that I do not know the date of my desired retirement age. It will only when my elderly parents are sadly no longer here.....As I mentioned previously, although elderly, 88yo / 91yo my parents are reasonably physically well, no major illnesses, and therefore it can't really be predicted when they'll be no longer around....could be next year, could be several years' time...


This is another reason why I thought a SIPP may be the simplest option

Ah, sorry, I hadn't appreciated what you were saying. If your retirement age depends on when your parents are no longer here the SIPP may well win out, simply because it gives you greater certainty (although obviously not complete). I would, however, suggest still costing up additional pension in the LGPS and looking at what actuarial reduction does at different ages. The formulas for calculating actuarial reduction are available, although a bit of badgering may be necessary to get hold of them.

AlanP_2

ValiantSon wrote: »

I wouldn't bother with AVCs. They tend not to perform brilliantly.

Our LGPS AVC funds are running ahead of our SIPP funds over the last couple of years.

Surely it depends on what investment choices you make the same as it does with a SIPP?

ValiantSon

AlanP wrote: »

Our LGPS AVC funds are running ahead of our SIPP funds over the last couple of years.

Surely it depends on what investment choices you make the same as it does with a SIPP?

You don't get a lot of choice, though. I'm glad to hear that your AVCs appear to be doing okay. I know a lot of people, however, who are not so fortunate. Personally, I would always choose to buy additional pension and then look to a SIPP or S&S ISA to augment that.

scoot65

ValiantSon wrote: »

Ah, sorry, I hadn't appreciated what you were saying. If your retirement age depends on when your parents are no longer here the SIPP may well win out, simply because it gives you greater certainty (although obviously not complete). I would, however, suggest still costing up additional pension in the LGPS and looking at what actuarial reduction does at different ages. The formulas for calculating actuarial reduction are available, although a bit of badgering may be necessary to get hold of them.

Yes, that's my 'dilemma', I don't actually have a date / age in mind I can work towards.........

Fubbly

Scoot65, you should have rule of 85 protection if you retire after 56. You can therefore take your pre 2014 benefits unreduced at 60 and with a max 20 -25% reduction protection (on pre 2014 element ) if retiring between 56-60. In your position I'd be looking at AVCs rather than a SIPP for the lump sum tax benefit you will get if taking at the same time as your main pension . As with a SIPP, you can still take the AVC earlier if necessary, just without the additional tax benefit.