50 years old. Can save for 5 years. SIPP, ISA S&S or other?

bluenose1

Elika0215 wrote: »

Thank you. So, if the SIPP or ISA were in exactly the same fund (with exactly the same fees) and I withdrew the lot at 55, then it would be worth around the 6.25% more from the SIPP. Have I understood that correctly?

. Yes, each £80 contributed is topped up to £100 and you would withdraw £85 if paying tax -6.25%.

Thank you. So, I can have a total of 3 £10k small pots which I can withdraw at 55, 56 and 57 (or anytime) without it affecting future contributions. Hope I've understood that right.
Yes. It counts as earnings so as long as it didn't put you in the 40% tax bracket you could in theory withdraw the 3 at 55

If the pot is worth more than £10k, can I withdraw £10k and shift the balance to another pension or can the total pot not exceed £10k?

My understanding is the pot in total cannot exceed £10k.

Scrounger

Elika0215 wrote: »

Thank you. So, if the SIPP or ISA were in exactly the same fund (with exactly the same fees) and I withdrew the lot at 55, then it would be worth around 6.25% more from the SIPP...

Could be up to 25% more from the SIPP (ie if you were a non-tax payer) :beer:

Scrounger

Elika0215

Really helpful stuff. Thank you.

Found this on AJ Bell which I think covers my questions. Hope it helps others:

"Small lump sums can be taken from age 55 where you have a small pension pot of £10,000 or less. The whole pot must be withdrawn and it will taxed in the same way as an UFPLs with 25% tax free and the rest subject to income tax. Up to 3 pension pots can be treated as small lump sums.

The advantage of taking a small lump sum is that the withdrawal is not tested against the lifetime allowance – this could be important if you have already used the allowance or think that you might do so. Also, taking a small lump sum will not trigger the money purchase annual allowance, enabling you to make future contributions over £4,000 if you wish."

Link to full article: https://www.youinvest.co.uk/pensions-and-retirement/accessing-your-pension/lump-sum

AlanP_2

Elika0215 wrote: »

Unfortunately not. It's the LGPS scheme so they don't have the option of tax free withdrawals at 55

Have a look at the Lgps AVC scheme which let's you build an invested pot like a SIPP but that you can take as your tax free lump sum when you retire.