vanguard sipp - clueless advise please

gele

A bit about me. I am 55.  Most savings [which aren't a lot] are in  a cash ISA,  a couple of regular savers and a Santander 123  recently downgraded   to Santander lite] I was happy with this set up til relatively recently when all rates plummeted.  Have LGPS pension but only been in it 8 years so is worth very little and at my age isn't going to grow considerably. I also have a very small old pension that I haven't added to in years so  have bitten the bullet and today transferred it [£8500] to a DIY Vanguard Sipp [lifestyle 60] with the intention of adding to it.  I have no idea where I go from here. Any advice please on how best to make use of it from this point. I have pretty much no experience of managing my own pension.

Dazed_and_C0nfused

gele said:

A bit about me. I am 55.  Most savings [which aren't a lot] are in  a cash ISA,  a couple of regular savers and a Santander 123  recently downgraded   to Santander lite] I was happy with this set up til relatively recently when all rates plummeted.  Have LGPS pension but only been in it 8 years so is worth very little and at my age isn't going to grow considerably. I also have a very small old pension that I haven't added to in years so  have bitten the bullet and today transferred it [£8500] to a DIY Vanguard Sipp [lifestyle 60] with the intention of adding to it.  I have no idea where I go from here. Any advice please on how best to make use of it from this point. I have pretty much no experience of managing my own pension.

The LGPS pension won't "grow" as it is a Defined Benefit scheme.  The amount of this pension will be determined by how long you are in the scheme and how much you earn, probably year by year but part of it may be based upon your salary (or full time equivalent salary if part time) when the pension comes into payment.

Do you earn enough to have contributed £8,500 into a SIPP?

As you have already chosen a fund what additional information are you after?

xylophone

Do you earn enough to have contributed £8,500 into a SIPP?

The OP has transferred an old pension of this value into the SIPP rather than making a new contribution?

I also have a very small old pension that I haven't added to in years so  have bitten the bullet and today transferred it [£8500] to a DIY Vanguard Sipp [lifestyle 60] with the intention of adding to it. 

Sailtheworld

If the intention is to add to the Lifestyle 60 then just set up a regular savings plan - I've not checked the details but assume the Vanguard SIPP has such a thing.

gele

Thanks for the replies. I am completely new to SIPPs although have read a lot about vanguard life strategy on here so thought it a good choice. I can add funds to the £8500 transferred pot but wasn't sure it was a simple as that. I have another £8k I could add in a lump sum which had been sitting in Santander 123 or I could add it monthly. How does tax relief work if I just add it from my Santander account? Sorry I appear clueless, that's because I am:) Please state the obvious as it wont be obvious to me:)

Dazed_and_C0nfused

xylophone said:

Do you earn enough to have contributed £8,500 into a SIPP?

The OP has transferred an old pension of this value into the SIPP rather than making a new contribution?

I also have a very small old pension that I haven't added to in years so  have bitten the bullet and today transferred it [£8500] to a DIY Vanguard Sipp [lifestyle 60] with the intention of adding to it. 

Good point.  Note to self.  Stop multi tasking!

Dazed_and_C0nfused

gele said:

Thanks for the replies. I am completely new to SIPPs although have read a lot about vanguard life strategy on here so thought it a good choice. I can add funds to the £8500 transferred pot but wasn't sure it was a simple as that. I have another £8k I could add in a lump sum which had been sitting in Santander 123 or I could add it monthly. How does tax relief work if I just add it from my Santander account? Sorry I appear clueless, that's because I am:) Please state the obvious as it wont be obvious to me:)

The pension company adds a 25% uplift.

For example if you contribute £100 they will add £25 giving you £125 in your pension fund.

The £25 is 20% tax relief on the gross amount of £125.

Unless you pay 21% tax (Scotland) or higher rate tax then nothing more to do.

xylophone

Have LGPS pension but only been in it 8 years so is worth very little and at my age isn't going to grow considerably. 

You are currently contributing to the LGPS (a DB Scheme)? If so, you have relevant earnings for the purposes of tax relief on pension contributions.
See below under
Q: My client is an active member of his employer’s defined benefit pension scheme. He also wants to make a personal pension contribution.
https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-contributions-qa/
You have chosen a fund  and will contribute a certain amount each month?

Albermarle

I have another £8k I could add in a lump sum which had been sitting in Santander 123 or I could add it monthly

Apart from the tax relief , which is covered above , you have to consider the separate investment strategy/risk .

You have transferred £8.5K from an old pension into VLS 60 ( within a SIPP) Do you know what it was invested in within the old pension? Was it something similar ( with 60% equity content ) or something less/more risky .

In any case VLS 60 is not a risk free product, and can go up and down with the financial markets , so are you comfortable to now transfer another £8K from a safe savings account to VLS 60? Maybe it would be better to space out the investments a little bit more , or add £2K every couple of months for example.

If this £8K is your only savings then in any case maybe better to leave it as it is in case of emergencies .

gele

The old pension [£8500 ] was with Royal London but I can tell you no more re risk and equity/bond split. The way I saw it was that I'd had it over 20 yrs, hadn't paid into it for over 15 yrs  and was doing nothing with it so it felt like 'free money' so I was willing to take a considered risk. The additional £8k was making 3% ,then 1.5% in Santander 123 and soon only 1% so I'm thinking if this is put in the new pension, if it only makes 2% average over the next 10 yrs it's double Santander. Its not my only savings, I have 2 regular savers maturing in the next 3 months which amount to about 6k

gele

My other option with this 8k is to put it in a 90 day notice ISA where I would get 1.4%. This wouldn't build up my SIPP though and a my pension forecast through LGPS isn't great, I thought I needed to try to increase my pension pot more. I have made enough contributions to get full state pension according to govt website.