SIPP for Elderly person

RomfordNavy

Asking the question on behalf of an elderly person who for the first time in many years has just started paying tax, slightly under £1500 a year. Question is should she open a SIPP to pay into in-order to dissipate that tax liability or is the cost of doing so more than the saving available.

Personally I have little knowledge about SIPPs as I don't have one, I have chosen to use ISAs instead hence looking for advice from the forum.

Thanks,

BoGoF

Paying into a SIPP won't reduce their tax liability unless they are a 40% taxpayer which sounds unlikely if the tax is only £1500

bowlhead99

How old is 'elderly'? Generally only youngsters under 75 will benefit from being able to pay into a pension.

And what are they paying tax on - employment or self employed business income (which could be put into a pension to avoid or defer paying tax on it), or savings/investment /pension income (which could not be put into a pension, other than the £3600 gross contributions which all of us under 75 can make)?

RomfordNavy

bowlhead99 wrote: »

How old is 'elderly'? Generally only youngsters under 75 will benefit from being able to pay into a pension.

And what are they paying tax on - employment or self employed business income (which could be put into a pension to avoid or defer paying tax on it), or savings/investment /pension income (which could not be put into a pension, other than the £3600 gross contributions which all of us under 75 can make)?

Elderly = nearly 90

Income is Government Pension + deceased husbands Company Pension + Government 'Attendance Allowance'. Lower rate tax band, but now that her Married Couples Allowance has been taken away she is a bit over the tax allowance.

AnotherJoe

They are too old. 75 is the cut off point.

menziesthefish

Elderly = nearly 90

At this age the lady would not receive tax relief on a personal pension contribution, so there would be no immediate tax benefit in her paying into a SIPP - certainly not one that would reduce her income tax bill.