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If you are wearing my shoes. (Redux)

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  • eskbanker
    eskbanker Posts: 38,022 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Thumbs_Up said:
    Can some one answer this please.
    I won't rule out work - Infact i did some Christmas causal work earning £2,900 gross.
    I am living the life of Riley at the moment no real outgoing cost, but ofcourse this can change. Home to buy cost? Below £280,000 - maybe.

    Question - I have already contributed £2,800 in this tax year to my vanguard sipp lifestrategy 60. If i am correct with the gross earnings above can i contribute another £2,825 and the tax man will add £725?
    As I understand it, your additional earnings aren't enough to allow any further contributions beyond the non-earning limit, so you're still constrained to contributing £2,880 net/£3,600 gross, so if you've paid £2,800 into your SIPP then you can only add £80 more.
  • RetSol
    RetSol Posts: 554 Forumite
    Fifth Anniversary 500 Posts Photogenic Name Dropper
    I haven’t mentioned  this but I was paying 42% salary  towards my works pension so give me credit here.

    Reading your threads, it seems to me that you have done a remarkably good job in order to get yourself into the financial position which you are in.

    In the words of Eckhart Tolle (a writer on spirituality, not investing!), a "mistake" is only a mistake if you don't learn from it. 

  • zagfles
    zagfles Posts: 21,548 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    Thumbs_Up said:
    atush said:
    If you are unemployed, why are you not claiming Job seekers allowance, and looking for work?

    Are you paying rent to the relative you live with?

    6 weeks is all you can claim when you have £500k in assets. Currently not looking for work, but if i relocate somewhere else in the country i won't rule it out. Open to be character assassinated here but no real outgoing cost.

    6 months not weeks

  • QrizB
    QrizB Posts: 19,712 Forumite
    10,000 Posts Fourth Anniversary Photogenic Name Dropper
    edited 9 January 2022 at 3:32PM
    Thumbs_Up said:
    QrizB said:
    No, I did not overlook the state pension, although I was somewhat pessimistic with £24k/15k. It's £26k/£20k.
    You have £500k of assets plus pensions and are 55 years old.
    • 55 to 60 - 5 years @ £26k from assets - £130k
    • 60 to 67 - 7 years @ £23k from assets - £161k plus (£3k pension pa)
    So at 67 you'll have spent £291k from your £500k and have £209k left, plus £98k from your DC pension. That's £307k. Safe drawdown rates are much discussed but if we go with 4%, £307k will yield £12k pa. Plus state & £3k pensions makes £25k pa for the rest of your life.
    If you spend £200k on a home, you're only starting with £300k.
    • 55 to 60 - 5 years @ £20k from assets - £100k
    • 60 to 67 - 7 years @ £17k from assets - £119k plus (£3k pension pa)
    At 67 you'll have spent £219k and have £81k left, plus £98k DC - total £179k. 4% drawdown will yield £7k, Plus state & £3k pensions makes £20k pa for the rest of your life.

    My model isn't very complicated but you can see how I got those numbers.

    Thank you . But if i was to say i can live off £12,500 a year what inpact would this have on the calculations you have put up.
    If you have a specific income in mind, you can adjust the nujmbers to suit.
    Or try cfiresim for yourself; it's a more sophisticated model and will let you see the historic effects of holding cash vs. a tracker fund.

    Edit: this is a cfiresim simulation that's close to your proposal, if you want somewhere to start. It's in dollars but read them as pounds; it also uses US historic data for market growth and inflation, which isn't quite the same as UK data.
    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill Coop member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 34 MWh generated, long-term average 2.6 Os.
    Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!
  • Thumbs_Up
    Thumbs_Up Posts: 965 Forumite
    500 Posts First Anniversary Name Dropper Photogenic
    eskbanker said:
    Thumbs_Up said:
    Can some one answer this please.
    I won't rule out work - Infact i did some Christmas causal work earning £2,900 gross.
    I am living the life of Riley at the moment no real outgoing cost, but ofcourse this can change. Home to buy cost? Below £280,000 - maybe.

    Question - I have already contributed £2,800 in this tax year to my vanguard sipp lifestrategy 60. If i am correct with the gross earnings above can i contribute another £2,825 and the tax man will add £725?
    As I understand it, your additional earnings aren't enough to allow any further contributions beyond the non-earning limit, so you're still constrained to contributing £2,880 net/£3,600 gross, so if you've paid £2,800 into your SIPP then you can only add £80 more.
    Ok, so i won't get any more tax relief this tax year. Can i tell Vanguard that i want to put in say £20,000 towards my sipp but advised them i do not want tax relief added ? Is there a mechanism in place if you were to log in add money to the sipp and check a box not to add tax relief? A while back I did message vanguard but a got a vague reply, perhaps I did not phrase the question correctly. Thanks.




  • eskbanker
    eskbanker Posts: 38,022 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Thumbs_Up said:
    eskbanker said:
    Thumbs_Up said:
    Can some one answer this please.
    I won't rule out work - Infact i did some Christmas causal work earning £2,900 gross.
    I am living the life of Riley at the moment no real outgoing cost, but ofcourse this can change. Home to buy cost? Below £280,000 - maybe.

    Question - I have already contributed £2,800 in this tax year to my vanguard sipp lifestrategy 60. If i am correct with the gross earnings above can i contribute another £2,825 and the tax man will add £725?
    As I understand it, your additional earnings aren't enough to allow any further contributions beyond the non-earning limit, so you're still constrained to contributing £2,880 net/£3,600 gross, so if you've paid £2,800 into your SIPP then you can only add £80 more.
    Ok, so i won't get any more tax relief this tax year. Can i tell Vanguard that i want to put in say £20,000 towards my sipp but advised them i do not want tax relief added ? Is there a mechanism in place if you were to log in add money to the sipp and check a box not to add tax relief? A while back I did message vanguard but a got a vague reply, perhaps I did not phrase the question correctly. Thanks.
    I don't believe that any SIPP providers would accept contributions on that basis, but happy to be corrected if anyone knows otherwise....
  • QrizB
    QrizB Posts: 19,712 Forumite
    10,000 Posts Fourth Anniversary Photogenic Name Dropper
    Thumbs_Up said:
    Ok, so i won't get any more tax relief this tax year. Can i tell Vanguard that i want to put in say £20,000 towards my sipp but advised them i do not want tax relief added ? Is there a mechanism in place if you were to log in add money to the sipp and check a box not to add tax relief? A while back I did message vanguard but a got a vague reply, perhaps I did not phrase the question correctly. Thanks.
    Given that you've already paid tax on the £20k, won't get tax relief on the way in but will have to pay tax on the way out, a SIPP is not an obvious place to invest it.
    Do you have ISA allowance available? You could put it there but invested in the same funds your SIPP uses. Otherwise, open a GIA with Vanguard and you put it there (again, in the same funds as your SIPP) ready to move into a SSISA next year.

    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill Coop member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 34 MWh generated, long-term average 2.6 Os.
    Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!
  • Sadly £20k in a cash ISA. I had to google GIA.

    I couldn’t see any advantage until the Penney dropped. Make your money work today instead of waiting until the new financial tax year.

     







  • You could always invest it outside an ISA for the next 3 months and move it into an ISA in April at the start of the next tax year. The Capital Gains Tax allowance for 2021/22 is £12,300, https://www.gov.uk/capital-gains-tax/allowances
    It's just my opinion and not advice.
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