SIPP and government pension

greatkingrat

Hansplace said:

Albermarle,

You sums up my intention. Maximum amount without paying tax.
Want the extra 20% or 25% from the government when topping up my SIPP but have no intention of paying tax at all after I semi retire next year at 45 years old.
Don't intend to pay for any furlough or dingies (apologies if this is wrong)

Thanks

So you don't want to pay tax after retirement, but are quite happy to pay 40% tax now? Seems an odd way of looking at things.

Hansplace

I am paying 40% now as I am forced to because I am working. Do get back most of it when putting money in SIPP.
20% extra on government contribution into SIPP
and 
20% claim back year end when filing my tax.

  

Albermarle

Hansplace said:

I am paying 40% now as I am forced to because I am working. Do get back most of it when putting money in SIPP.
20% extra on government contribution into SIPP
and 
20% claim back year end when filing my tax.

  

Yes but if you stop paying into the SIPP, as you suggested , then you will be paying 40% tax again .

Hansplace

I did mentioned that I intend to semi retired next year and just earn the £12500 tax free allowance every year 

Linton

Hansplace said:

I did mentioned that I intend to semi retired next year and just earn the £12500 tax free allowance every year 

Even if your scheme to pay less tax makes you poorer overall? 

Alice_Holt

Hansplace said:

I did mentioned that I intend to semi retired next year and just earn the £12500 tax free allowance every year 

       Why?

      Not just to spite the taxman, I hope.

     Or have you some long held, life changing ambition you wish to achieve?

     

Hansplace

Yes just to spite the taxman and also want to travel the world / semi retire while I am still in my youth  

Flugelhorn

Once a higher rate tax payer, always a higher rate tax payer. Would I be happy living on that pension you have in mind? would I 'eck. 

You would need to be back to student type travel round the world 

cloud_dog

Hansplace said:

I did mentioned that I intend to semi retired next year and just earn the £12500 tax free allowance every year 

Ok BUT.... earning at/below the PA and paying no tax whilst contributing to a SIPP and gaining 25% (20% TR) is almost as good as paying in whilst a HRT payer and drawing and paying 20% tax.  So, even if you pay tax you will still be better off using the pension and paying tax.

If your whole question is that you need to maximise your ISA otherwise you won't have sufficient capital to support early retirement/reduced working, then that is fine but your apparent scotoma on tax may be leading you to make the wrong choices.