SIPPs

Clive_Woody

My wife works part as a teaching assistant and earns less than £7k per annum (doesn't pay tax). I was reading about SIPPs and my understanding is that we could pay £2880 per year into a SIPP and she would receive tax relief on this taking the value to £3600.

I had a few basic questions:

• Any advice on where to open a SIPP, particularly relating to fees/charges?
• Is the tax relief applied automatically?
• We currently have money invested in Vanguard LS80 in an ISA. Are similar funds suitable for holding in a SIPP?
• Can anyone recommend a good place for reading up on SIPPs and selecting investments?

Any advice would be much appreciated as this is new to me but from what little I know seems like a good idea for planning for our retirement.

Linton

Basic rate tax relief is applied automatically for personal contributions to a DIPP.
Almost anything you can invest in from an ISA can also be bought in a SIPP including the VLS funds.
There are lots of relevant threads in this forum and lots of information can be found through Google

Is your a member of her employers scheme?

dunstonh

My wife works part as a teaching assistant and earns less than £7k per annum (doesn't pay tax). I was reading about SIPPs and my understanding is that we could pay £2880 per year into a SIPP and she would receive tax relief on this taking the value to £3600.

You can do that but there is no £3600 limit for her. She can pay upto 100% of her gross income minus occupational pension. So, that ~£7k figure.

Clive_Woody

dunstonh wrote: »

You can do that but there is no £3600 limit for her. She can pay upto 100% of her gross income minus occupational pension. So, that ~£7k figure.

Thanks

Is it correct that she would only receive tax relief on the first £2880?

Linton

Clive_Woody wrote: »

Thanks

Is it correct that she would only receive tax relief on the first £2880?

No, she would receive tax relief on all of it. This isnt the government being excessively generous as she may be taxed on it when she withdraws the money, depending on whether she has other soures of income.

Camster

No, you receive tax relief on the full amount you put into the SIPP, provided it is within the maximum allowable amount based on her income and other pension contributions.

My wife has done this with most of her income for the past few years.

Clive_Woody

Camster wrote: »

No, you receive tax relief on the full amount you put into the SIPP, provided it is within the maximum allowable amount based on her income and other pension contributions.

My wife has done this with most of her income for the past few years.

Thanks, much appreciated. I had misunderstood what I found on google as it seemed to suggest the tax relief was limited to the smaller amount.

She does have a couple of small pension pots from previous employers which would provide limited income in retirement so the intention of the SIPP would be to provide additional funds.

cloud_dog

Clive_Woody wrote: »

Thanks, much appreciated. I had misunderstood what I found on google as it seemed to suggest the tax relief was limited to the smaller amount.

That is correct IF she had no pensionable income, i.e. salary from her part time job.

BLB53

We currently have money invested in Vanguard LS80 in an ISA. Are similar funds suitable for holding in a SIPP?

You should be able to open a SIPP with your ISA provider. Most of the major platforms such as AJ Bell Youinvest, HL etc will offer both and yes you can invest in VLS in a SIPP.

Can anyone recommend a good place for reading up on SIPPs and selecting investments?

Recommend get hold of a copy of 'DIY Pensions' by Edwards.

FatherAbraham

Clive_Woody wrote: »

My wife works part as a teaching assistant and earns less than £7k per annum (doesn't pay tax). I was reading about SIPPs and my understanding is that we could pay £2880 per year into a SIPP and she would receive tax relief on this taking the value to £3600.

I had a few basic questions:

• Any advice on where to open a SIPP, particularly relating to fees/charges?
• Is the tax relief applied automatically?
• We currently have money invested in Vanguard LS80 in an ISA. Are similar funds suitable for holding in a SIPP?
• Can anyone recommend a good place for reading up on SIPPs and selecting investments?

Any advice would be much appreciated as this is new to me but from what little I know seems like a good idea for planning for our retirement.

You asked specifically about charges...

You're focusing on SIPPs, which is a little over-specific - any type of personal pension would do, and some general personal pensions may beat a SIPP hands down on charges for small pot sizes.

Clive_Woody

BLB53 wrote: »

You should be able to open a SIPP with your ISA provider. Most of the major platforms such as AJ Bell Youinvest, HL etc will offer both and yes you can invest in VLS in a SIPP.


Recommend get hold of a copy of 'DIY Pensions' by Edwards.

Thanks. The VLS is held directly with Vanguard and I don't think they currently offer SIPPs, unless I am missing something on their website.

I will have a look for that book, thanks :money: