SIPP advice please

vickyholly

Hi, I became a widow in Jan, and am currently not working while my daughter and i adjust to this !!!!!! new life.Up until now i have been self employed. I dont have a pension as we were maxing my husbands and i was paying off debt. (Which im very grateful now). I have no debt or mortgage, i have emergency fund in chase. But i dont know if i can or should set up a sipp pension fund with a lump sum, or put into fixed savings. Currently my money is in NS and I not doing much. Any advice gratefully received

Dazed_and_C0nfused

You can do but in any tax year you don't earn anything your contributions will be limited £3,600 gross.

You pay £2,880 and the pension company adds £720 in basic rate relief.  This is added irrespective of whether you pay any tax or not.

vickyholly

Dazed_and_C0nfused said:

You can do but in any tax year you don't earn anything your contributions will be limited £3,600 gross.

You pay £2,880 and the pension company adds £720 in basic rate relief.  This is added irrespective of whether you pay any tax or not.

ok, so a fixed savings account might seem like the better option to me then

Dazed_and_C0nfused

Why not add the £2,880 each year and get the free £720?

vickyholly

Dazed_and_C0nfused said:

Why not add the £2,880 each year and get the free £720?

I think i misunderstood. I need to go and Google more about sipp. So can I open a sipp if I'm not working? 

squirrelpie

vickyholly said:

Hi, I became a widow in Jan, and am currently not working while my daughter and i adjust to this !!!!!! new life.Up until now i have been self employed. I dont have a pension as we were maxing my husbands and i was paying off debt. (Which im very grateful now). I have no debt or mortgage, i have emergency fund in chase. But i dont know if i can or should set up a sipp pension fund with a lump sum, or put into fixed savings. Currently my money is in NS and I not doing much. Any advice gratefully received

There's a lot of things you didn't say. What happened to your husband's pension if you were maxing it? Was it DC or DB? What are your priorities now - how old are your daughter and you (approx if you want)?

Anybody can open a SIPP, whether they're earning or not, and anybody can put in £2880 which will be made up to £3600. You can put in more if you are earning more. But there are other sorts of pension saving too.

xylophone

I think i misunderstood. I need to go and Google more about sipp. So can I open a sipp if I'm not working? 

Yes, you can but without "relevant earnings" you are limited in the amount you may contribute and receive tax relief.

The annual contribution would be £2880 net - the pension provider would claim £720 and add it to your pension.

vickyholly

Thanks everyone, Seems ive completely misunderstood SIPPs, i think im gonna get some advice,