Are we on the right track? Advice welcome

Dew_2

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Are you claiming higher rate relief on your SIPP contributions?

Have you both checked your State Pension forecasts on gov.uk (in detail) to see what you have accrued to date and how many more years are needed to reach the standard £179.60/week?

I don't earn enough to pay higher rate tax (unless I've missed something?!). Yes we've checked Gov.uk. 4 years to go for me  and 3 3 for him to give 35 year contributions.

Your original post suggests otherwise.

Me:55.
Earn £49,950 plus £4k car allowance. 
£275k in savings from recent house sale (split across different savings accounts/premium bonds)
£248k in SIPP - I pay in £600 gross a month
£20k in work defined contribution (non contributory) pension. Work pays in £468 a month
I'll probably aim to do a drawdown from these 

I don't think the car allowance counts, or does it..?

Dazed_and_C0nfused

Dew_2 said:

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Are you claiming higher rate relief on your SIPP contributions?

Have you both checked your State Pension forecasts on gov.uk (in detail) to see what you have accrued to date and how many more years are needed to reach the standard £179.60/week?

I don't earn enough to pay higher rate tax (unless I've missed something?!). Yes we've checked Gov.uk. 4 years to go for me  and 3 3 for him to give 35 year contributions.

Your original post suggests otherwise.

Me:55.
Earn £49,950 plus £4k car allowance. 
£275k in savings from recent house sale (split across different savings accounts/premium bonds)
£248k in SIPP - I pay in £600 gross a month
£20k in work defined contribution (non contributory) pension. Work pays in £468 a month
I'll probably aim to do a drawdown from these 

I don't think the car allowance counts, or does it..?

I can't see on what grounds it wouldn't be taxable income.

And that's before including any other taxable income such as interest or dividends.

You can easily check this by looking at your payslips and P60.  I would expect your taxable pay on a recent payslip to be shown as £4,495, not £4,162

Albermarle

Thank you for this, it's food for thought. We'll talk this through. I guess it feels more like spreading the risk by having liquid cash as well as a SIPP.  Stock markets are looking shaky and 5ish years doesn't give a lot of time for recovery if things really tank

Of course it is good to have a good backup of liquid cash , but it loses value with inflation , so it is all about getting the balance right.

Stock markets always look shaky and are entirely unpredictable. All we know is that in the long term they should outpace inflation.

If he opens a SIPP for the relatively modest amounts suggested , he has a 20% start . Also it does not have to be held in a 100% equity fund , something more medium /low risk would be more suitable for the time scale involved .

Presumably if 'markets tank' your own large SIPP would be the worst affected ,  rather than one with just a few Grand in it .

Dew_2

My SIPP is primarily in North American, UK Smaller Companies and Property funds  - all moderate risk.  A dc pension fund is like being on a magical mystery tour. Who knows where it's ultimate destination lies!  Fiance us much more risk averse than me. Neither of us has children so if things went very off plan, we could look at equity release.

cloud_dog

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Are you claiming higher rate relief on your SIPP contributions?

Have you both checked your State Pension forecasts on gov.uk (in detail) to see what you have accrued to date and how many more years are needed to reach the standard £179.60/week?

I don't earn enough to pay higher rate tax (unless I've missed something?!). Yes we've checked Gov.uk. 4 years to go for me  and 3 3 for him to give 35 year contributions.

Your original post suggests otherwise.

Me:55.
Earn £49,950 plus £4k car allowance. 
£275k in savings from recent house sale (split across different savings accounts/premium bonds)
£248k in SIPP - I pay in £600 gross a month
£20k in work defined contribution (non contributory) pension. Work pays in £468 a month
I'll probably aim to do a drawdown from these 

I don't think the car allowance counts, or does it..?

I can't see on what grounds it wouldn't be taxable income.

And that's before including any other taxable income such as interest or dividends.

You can easily check this by looking at your payslips and P60.  I would expect your taxable pay on a recent payslip to be shown as £4,495, not £4,162

It counts and is taxable.

EDIT: Sorry D&C meant to reply to Dew_2 to reaffirm.

Dew_2

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Are you claiming higher rate relief on your SIPP contributions?

Have you both checked your State Pension forecasts on gov.uk (in detail) to see what you have accrued to date and how many more years are needed to reach the standard £179.60/week?

I don't earn enough to pay higher rate tax (unless I've missed something?!). Yes we've checked Gov.uk. 4 years to go for me  and 3 3 for him to give 35 year contributions.

Your original post suggests otherwise.

Me:55.
Earn £49,950 plus £4k car allowance. 
£275k in savings from recent house sale (split across different savings accounts/premium bonds)
£248k in SIPP - I pay in £600 gross a month
£20k in work defined contribution (non contributory) pension. Work pays in £468 a month
I'll probably aim to do a drawdown from these 

I don't think the car allowance counts, or does it..?

I can't see on what grounds it wouldn't be taxable income.

And that's before including any other taxable income such as interest or dividends.

You can easily check this by looking at your payslips and P60.  I would expect your taxable pay on a recent payslip to be shown as £4,495, not £4,162

Thank you, I'll check this out 👍

Dew_2

cloud_dog said:

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Dew_2 said:

Dazed_and_C0nfused said:

Are you claiming higher rate relief on your SIPP contributions?

Have you both checked your State Pension forecasts on gov.uk (in detail) to see what you have accrued to date and how many more years are needed to reach the standard £179.60/week?

I don't earn enough to pay higher rate tax (unless I've missed something?!). Yes we've checked Gov.uk. 4 years to go for me  and 3 3 for him to give 35 year contributions.

Your original post suggests otherwise.

Me:55.
Earn £49,950 plus £4k car allowance. 
£275k in savings from recent house sale (split across different savings accounts/premium bonds)
£248k in SIPP - I pay in £600 gross a month
£20k in work defined contribution (non contributory) pension. Work pays in £468 a month
I'll probably aim to do a drawdown from these 

I don't think the car allowance counts, or does it..?

I can't see on what grounds it wouldn't be taxable income.

And that's before including any other taxable income such as interest or dividends.

You can easily check this by looking at your payslips and P60.  I would expect your taxable pay on a recent payslip to be shown as £4,495, not £4,162

It counts and is taxable.

EDIT: Sorry D&C meant to reply to Dew_2 to reaffirm.

Thank you, I didn't realise it counted!

Dazed_and_C0nfused

If you were paying higher rate tax and contributing (yourself) to the SIPP in previous tax years you can claim higher rate tax relief back to 2017:18 (you must claim for 2017:18 before the end of the current tax year).

Higher rate tax relief on "relief at source" pension contributions works by increasing the amount of your basic rate tax band, meaning you can pay more at 20% and less at 40%.

As such any higher rate relief due is limited by the amount of higher rate tax paid.  For example if you contributed £7,200 (gross) and paid higher rate tax on £1,000 then the higher rate tax relief would be £200 (£1,000 taxed at 20% instead of 40%).

Dew_2

Dazed_and_C0nfused said:

If you were paying higher rate tax and contributing (yourself) to the SIPP in previous tax years you can claim higher rate tax relief back to 2017:18 (you must claim for 2017:18 before the end of the current tax year).

Higher rate tax relief on "relief at source" pension contributions works by increasing the amount of your basic rate tax band, meaning you can pay more at 20% and less at 40%.

As such any higher rate relief due is limited by the amount of higher rate tax paid.  For example if you contributed £7,200 (gross) and paid higher rate tax on £1,000 then the higher rate tax relief would be £200 (£1,000 taxed at 20% instead of 40%).

I've already submitted self assessment tax returns for this year and those prior without including pension relief at 40% so I guess it's too late as my claims have already been made for those years?

Dazed_and_C0nfused

Dew_2 said:

Dazed_and_C0nfused said:

If you were paying higher rate tax and contributing (yourself) to the SIPP in previous tax years you can claim higher rate tax relief back to 2017:18 (you must claim for 2017:18 before the end of the current tax year).

Higher rate tax relief on "relief at source" pension contributions works by increasing the amount of your basic rate tax band, meaning you can pay more at 20% and less at 40%.

As such any higher rate relief due is limited by the amount of higher rate tax paid.  For example if you contributed £7,200 (gross) and paid higher rate tax on £1,000 then the higher rate tax relief would be £200 (£1,000 taxed at 20% instead of 40%).

I've already submitted self assessment tax returns for this year and those prior without including pension relief at 40% so I guess it's too late as my claims have already been made for those years?

If you've already submitted Self Assessment returns then you will have received the correct tax relief for each year via your Self Assessment calculation.

Or do you mean you have submitted returns without disclosing the relief at source pension contributions?