Funding a SIPP

homi

Probably a silly question , I am looking to open a SIPP with AJ Bell but was wondering can I fund the account from my normal savings account  ( savings from the last 4 years ) or does it have to be "earned funds" during the year? 
I am soletrader and have a business account which does contain funds but I intend to use for a house deposit.

I cannot just setup an direct debit as my earnings vary week to week  . Looking to invest a lump sum ( around 50% of my last years earnings  )
Thanks

bowlhead99

It doesn't matter when you got the individual pounds that you are putting into the pension. You can keep your old pounds in a savings account and pay your new pounds into the pension, or you can keep your new pounds in your business account and put the old pounds into the pension.

You do need to make enough earnings (taxable business profits) in the year in which you make the contribution. You mention the amount is 50% of your last year earnings. If you mean 50% of your current year earnings (i.e. the tax year that is about to end tomorrow), that would be fine, if you can get the money in by debit card in the remaining hours before the tax year finishes. If you don't put it in until Monday (2020/21 tax year) but the amount is still less than the amount you earn in that tax year, that's OK too.

Albermarle

The SIPP provider does not care where the money is sourced from ( apart from any suspected criminal activity/money laundering) and will add basic rate tax relief automatically, on the assumption you are entitled to it .

homi

Thanks for the information its much appreciated .  A quick question when buying into vanguard VLS is the price shown when I place the order the cost or is it when it actually is processed  ?  thanks again

bowlhead99

homi said:

Thanks for the information its much appreciated .  A quick question when buying into vanguard VLS is the price shown when I place the order the cost or is it when it actually is processed  ?  thanks again

Any price shown for Vanguard funds is the price calculated for some previous dealing point which you have already missed.  So any price shown is purely indicative, to give you an idea of its recent value.

When you place the order, if you are in time for the cut-off of that evening's net asset value calculation (i.e., you place the order early morning before the cut-off for that day's orders, and are included among the people who are getting new shares issued to them that evening) you will get that price calculated that coming evening. If you are too late to be included in that round because you have missed the cut-off, you'll be picked up with the orders for the next business day and get that following day's price instead.