Opening a SIPP after retirement

Umiamz

Albermarle said:

Umiamz said:

jimi_man said:

A lot depends on whether you’re a tax payer or not. If your USS pension exceeds the tax threshold then when you take out the £3600 you’ll have to pay 20% tax on 75% of it, so it’s not such a good deal. You end up with 6.25% extra - still not too bad but not as good. 

I’m not planning to pay in £2880 and withdraw £3600 every year, I’m actually going to invest it and leave it there. Having read some of the thread mentioned above it seems that most are just after the extra cash each year.

I’ve gone with Vanguard for the low platform fee.

Even if you leave it there for a few years , when you do take it out , the same situation will apply . 25% will be tax free and 75% taxable . Although you have currently £12570 personal tax allowance this is probably already used up by your USS pension and the state pension when it comes along . So for each £2880 you add you will only gain £180 taxwise ( = 6.25% as already mentioned ) 

You can leave a pension as an inheritance , which has the added advantage that it will not be included in your estate for inheritance tax purposes. In any case you should inform Vanguard of who should be the beneficiary of any pension pot left when you die. 

Yes, that’s fine - I’m aware of the tax position now, having read all the Vanguard literature.

hyperhypo

I've a timing related question on this subject, having made a  £2770 contribution to my uncrystallised SIPP in February 2022 but still haven't received tax payment from hmrc to date. I'm wondering which tax year my transaction will be recorded in... hopefully 21-22. Can anyone put me right on this please?

Dazed_and_C0nfused

Yes, with relief at source contributions it's when you paid that counts, not when the tax relief is added.

dunstonh

hyperhypo said:

I've a timing related question on this subject, having made a  £2770 contribution to my uncrystallised SIPP in February 2022 but still haven't received tax payment from hmrc to date. I'm wondering which tax year my transaction will be recorded in... hopefully 21-22. Can anyone put me right on this please?

Is that £2770 a typo?    

Assuming it is, you made a £3600 pension contribution in Feb 22.   The fact your provider doesn't prefund doesn't matter.  It is still £3600 made in that tax year.

hyperhypo

Dunstonh...yes my error..it was £2880 payment.. thanks for response.