Resource to determine if I should contribute to a SIPP if I will exceed my lifetime allowance

inventiontime · 3 March 2021 at 2:29PM

This is something I had feared as a 30-year-old with many years of pension growth remaining. I have analysed how a marginal contribution of £100,000 that falls entirely above the lifetime allowance would leave me in a number of scenarios. I have written a blog post on this, and made my spreadsheet available at: https://inventiontime11091.wixsite.com/website/post/should-i-invest-into-a-pensions-above-my-life-time-allowance
I hope this can be a useful resource for this forum, but as I am not a financial professional, I would really appreciate your feedback to help make it the useful resource that it can be. Do you think my assumptions and calculations are correct?
Thank you very much in advance for your help!

TVAS · 3 March 2021 at 3:19PM

Why don't you stick some of it into a stocks and shares ISA?
Why are you waiting until 75 to draw the benefits? If you take it early and deplete the fund there maybe no LTA.
One can't have an correct assumption it is an assumption only facts are true and one cannot predict future facts.

inventiontime · 3 March 2021 at 4:31PM

Thank you for the reply TVAS.
My ISA is maxed, and I agree, if I can avoid the LTA by taking them early I should do this. This analysis was to look at the case where I am 55 and there are benefits over the LTA, in which case I would want to leave them to compound for another 20 years tax-free if I don't need to touch them. The LTA will still be paid, but I benefit from the tax-free compounding.
Thank you for pointing that out on the assumptions. I meant to ask if you think I am applying the pension rules as they stand today correctly to this analysis. Thanks very much in advance for your advice.