Employer pension contributions into a SIPP

migwire281

Hi,

I started a new job in December and since paying off our mortgage I want to maximise my pension contributions. I'm 40yo and bundled all of my pensions into a SIPP a couple of years ago.

My new employer has just started taking pension deductions from me, and I was considering asking if they would pay it into my SIPP. However, reading on HL site it says their contribution doesn't received tax relief.

If they were to take my contribution, and pay it into the SIPP along with theirs, would my portion of it still get the tax relief?

I'm a little confused about it.

Thanks

Marcon

You would continue to get tax relief on your personal contributions whether paid direct by you to the SIPP provider, or whether paid via your employer - the provider would claim on your behalf and add this to your 'pot'. You would not get tax relief if contributions are made via salary sacrifice - this would count as an employer contribution and because employer contributions are paid gross there is no tax to be claimed (and of course, because it's an employer contribution, it doesn't count towards your taxable income).

Be aware that it is very unlikely your employer will be willing to deviate from their chosen scheme (unless you are very senior indeed) - the admin costs and the chances of error are higher than you might think.

Alexland

I agree it is unlikely your employer would consider a request to pay directly into your SIPP however your workplace pension scheme rules may allow you to occasionally transfer lump sums into your SIPP for more investment choice and potentially lower fees.

If your employer operates salary sacrifice to save the national insurance then paying into your workplace pension would be more efficient than you making a SIPP contribution.

Alex

dunstonh

My new employer has just started taking pension deductions from me, and I was considering asking if they would pay it into my SIPP. However, reading on HL site it says their contribution doesn't received tax relief.

Employer contributions dont get tax relief at source as the employer gets a reduction in corporation tax.

If the employer is willing to opt you opt and pay into your pension, and HL will accept contributions from an Opt out, then its not a problem.

Most employers wont do it as it gives them extra costs and means you are recorded as an opt out. If they do it for you, they need to do it for all employees.

Albermarle

My new employer has just started taking pension deductions from me, and I was considering asking if they would pay it into my SIPP.

Is there a specific reason for this ? have you compared sipp charges with your employers pension charges ? Sipp maybe cheaper, but maybe not if your employer is quite large and has negotiated a good deal .