Stakeholder pension or SIPP?

Albermarle

Seems SIPPs are very much normalised in the pension market now as being great way to get a good return, but I'm not sure it's that easy?

You have to be careful here in comparisons.
A SIPP ; A Personal Pension and A Stakeholder Pension are all just pension wrappers/providers , who provide the legal and tax framework in which way your pension money is accumulated, invested and taxed . In this respect they are almost identical for practical purposes. So more important is in what kind of funds your money is actually invested in, regardless of wether it is in a SIPP or PP or SHP..
A SIPP has a lot more choice of funds but for a novice investor that is not necessarily an advantage.

Dazed_and_confused

I became self employed last year so as the end of the tax year approaches I'm looking to open a pension to make the most of the 2018/2019 tax saving

Unless you are going to be a higher rate tax payer or are Scottish resident for tax purposes paying the Intermediate rate of tax a pension won't result in any personal "tax saving".

You will get basic rate tax relief added to the pension fund so they are tax efficient but that is different to saving you any tax off your personal Self Assessment tax liability.

Bluebetty_2

Unless you are going to be a higher rate tax payer or are Scottish resident for tax purposes paying the Intermediate rate of tax a pension won't result in any personal "tax saving".

Oh really? I thought personal pension contributions could be deducted off self-employed profits... OK I take back any claims of financial literacy

Prism

Bluebetty wrote: »

Oh really? I thought personal pension contributions could be deducted off self-employed profits... OK I take back any claims of financial literacy

No you need a limited company for that. When I used to be self-employed I would pay in a regular amount each month and then also consider an extra payment each march if I was likely to pay high rate tax for that year.

dunstonh

Bluebetty wrote: »

Oh really? I thought personal pension contributions could be deducted off self-employed profits... OK I take back any claims of financial literacy

It changed back in 2006. Self-employed now pay net contributions rather than gross. You still get tax relief (£80 net would be £100 gross going into the pension). It is handled at source now.

Alexland

If you are basic rate tax and under 40 consider a S&S LISA for upto £4k per tax year as it's the same 20% government contribution (taking £80 to £100) but no risk of tax on withdrawal from age 60.

My wife's experience of opening the Aviva stakeholder via Cavendish was that they were very slow so it might not even complete in time to make the contribution this tax year.

Alex