£10k surplus cash - SIPP top up?

Pats51

I have £10k sitting in an easy access account. Before 5 April should I put it into an old SIPP I have with Standard Life? I haven’t paid into it for nearly 20 years due to having three children, only working part time and then getting divorced. Or shall I start a new one with someone like Pension Bee or Vanguard? I’m 55 and realise I need to get on top of things. I asked a financial planner for advice six weeks ago and she’s not come back to me. I have already used the ISA allowance this year. All advice welcome please! 

molerat

How much earned income this year ? 

How much pension contribution have you already made this year ?

MX5huggy

Yes sounds like a good plan, use VG cheap as chips, can’t imagine the Standard Life pension is cheaper, pension bee 🐝 is really for combining old pensions.
Setting up and paying into VG is easier than a online grocery shop. 

This presumes you’ve got the earned income this year to cover such a pension contribution, and your work place pension is not salary Sacrifice. 

Marcon

Pats51 said:

I have £10k sitting in an easy access account. Before 5 April should I put it into an old SIPP I have with Standard Life? I haven’t paid into it for nearly 20 years due to having three children, only working part time and then getting divorced. Or shall I start a new one with someone like Pension Bee or Vanguard? I’m 55 and realise I need to get on top of things. I asked a financial planner for advice six weeks ago and she’s not come back to me. I have already used the ISA allowance this year. All advice welcome please! 

Do you have scope to add this amount to your SIPP? If you add £10K the provider will claim basic rate tax relief on your behalf and add that to your SIPP - so you need to be earning at least £12,500, assuming you haven't made any other pension contributions this year, or had contributions made on your behalf by an employer or other third party. 

If the only advice you asked about was in respect of this one matter, it's unlikely you would be taken on as a client, simply because it wouldn't make commercial sense. Good IFAs will have been inundated with tax returns (which this year will have run through to the end of February) and a mass of clients all vying for attention as the end of the financial year approaches. If you only approached one for the first time six weeks ago, no surprise that she's not come back to you - but did you actually chase up? 

dunstonh

should I put it into an old SIPP I have with Standard Life? 

Are you sure its a SIPP?  It would be highly unusual for a plan from 20 years ago with a normal consumer.  More likely to be a stakeholder pension if post 2001 or personal pension if before.

Or shall I start a new one with someone like Pension Bee or Vanguard?

Are they better or worse than the existing plan?

 I asked a financial planner for advice six weeks ago and she’s not come back to me. 

It is the busiest time of the year for advisers.  Many would find it difficult to see new clients on top of their existing at this point and prioritising does tend to happen.   With just £10k, you are going to be down the list.

Albermarle

Another alternative is to transfer the Standard Life Pension to a new Standard Life pension.
When you come to want to withdraw this pension , a more modern version will have more options.
You can call them, their customers service is quite responsive normally .

Pats51

MX5huggy said:

Yes sounds like a good plan, use VG cheap as chips, can’t imagine the Standard Life pension is cheaper, pension bee 🐝 is really for combining old pensions.
Setting up and paying into VG is easier than a online grocery shop. 

This presumes you’ve got the earned income this year to cover such a pension contribution, and your work place pension is not salary Sacrifice. 

Thanks. I don’t have a work place pension as I’m a sole trader. I don’t understand about the earned income to cover such a pension contribution - please feel free to elaborate - I am a pension dumb dumb ! 

QrizB

Pats51 said:

MX5huggy said:

Yes sounds like a good plan, use VG cheap as chips, can’t imagine the Standard Life pension is cheaper, pension bee 🐝 is really for combining old pensions.
Setting up and paying into VG is easier than a online grocery shop. 

This presumes you’ve got the earned income this year to cover such a pension contribution, and your work place pension is not salary Sacrifice. 

Thanks. I don’t have a work place pension as I’m a sole trader. I don’t understand about the earned income to cover such a pension contribution - please feel free to elaborate - I am a pension dumb dumb ! 

Only earned income - not unearned income from eg. investments or pensions - counts for pension purposes. Your gross pension contributions (after tax relief0 can't exceed your earned income.

There is a summary list of what counts here:
https://rossmartin.co.uk/private-client-a-estate-planning/income-losses-claims-reliefs/1034-relevant-earnings-for-pensions-purposes

For example if your earned income for the year was £10k you could only contribute £8k to a relief-at-source pension, as the £2k of tax relief would make your contribution up to match your £10k earned income.

Albermarle

Pats51 said:

MX5huggy said:

Yes sounds like a good plan, use VG cheap as chips, can’t imagine the Standard Life pension is cheaper, pension bee 🐝 is really for combining old pensions.
Setting up and paying into VG is easier than a online grocery shop. 

This presumes you’ve got the earned income this year to cover such a pension contribution, and your work place pension is not salary Sacrifice. 

Thanks. I don’t have a work place pension as I’m a sole trader. I don’t understand about the earned income to cover such a pension contribution - please feel free to elaborate - I am a pension dumb dumb ! 

This is a government website about pensions. Probably worth a look so you will not be pension dumb dumb anymore !

Pensions and retirement | Help with pensions and retirement | MoneyHelper

and this is MSE pensions site.
Pensions: Everything you need to know for retirement - MSE (moneysavingexpert.com)

xylophone

 There are rules relating to tax relievable pension contributions.

If you are aged under 75, pension contributions may be tax relievable.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100


 Note that even  a person who has no relevant earnings (or relevant earnings under £3,600) may still contribute up to a net £2880 to a personal pension/stakeholder pension (which operate "relief at source") and receive tax relief of up to £720 (which will be claimed by the pension provider and added to the contributor's "pot".

You say that you have not made any pension contributions in this tax year but would like to  pay an amount of £10,000 into your SIPP.

You may do this provided that you have relevant earnings for the tax year of at least £12,500.

If your relevant earnings are less than £12,500, you would need to adjust your contribution accordingly.

For example, suppose that your relevant earnings were £8000.

You could pay £6400 into your SIPP and your provider would claim relief of £1.600 and add it to your pot.

Dazed_and_C0nfused

You could pay £6400 into your SIPP and your provider would claim relief of £1600 and add it to your pot.

And that happens irrespective of whether you have paid any tax or not