SIPP contributions when drawing from a DB pension

n3ophyte

Hi everyone. I’ve been lurking here for just over a year and really appreciate the informed discussions taking place. Thank you all!

One question if I may? I retired and began drawing my DB pension (USS) a year ago. I’m now wondering if I can invest any surplus income from that into my Vanguard SIPP. I contributed £2880 for the tax relief a short while ago thinking that was the maximum I could invest each year. As a non-earner (currently) can I actually contribute more than that?

MX5huggy

No that’s the limit if you have no earned income in a tax year. 

n3ophyte

Thank you for confirming so quickly. I’ll squander the rest then

Dazed_and_C0nfused

n3ophyte said:

Thank you for confirming so quickly. I’ll squander the rest then

Have you checked your State Pension forecast?

It could be those funds would generate a much greater return than a SIPP if you need additional years NI to reach the standard new State Pension.

It's important you read the forecast in full, not just the headline figure.

dunstonh

Spouse/partner allowance available to be used?  

n3ophyte

Dazed_and_C0nfused said:

n3ophyte said:

Thank you for confirming so quickly. I’ll squander the rest then

Have you checked your State Pension forecast?

It could be those funds would generate a much greater return than a SIPP if you need additional years NI to reach the standard new State Pension.

It's important you read the forecast in full, not just the headline figure.

Yes I did check. Specifically …

I was going to wait until January 2030 before contributing another 2 or 3 years NI payments. Be a shame if I paid now and croaked before getting there?

Dazed_and_C0nfused

True.

Remember the 3rd year only adds £0.98/week.

Probably still worth it but not as good value as the first two!

n3ophyte

dunstonh said:

Spouse/partner allowance available to be used?  

Divorced, but appreciate the suggestion!

happybagger

Dazed_and_C0nfused said:

True.

Remember the 3rd year only adds £0.98/week.

Probably still worth it but not as good value as the first two!

Is there a formula for this sort of thing? ie how much each of the latter years adds?
I'm showing as 82.3% of the maximum, with 27 of 35 years complete (although last year not yet accounted for).
Annoyingly one year in the 1990s shows as "we're still checking", I was self employed paid class 2 and 4 but have no records now

Currently I'm just contributing as low-earnings self employed vis Class 2, no Class 4

LHW99

You could also consider deferring the State Pension for a while (when you get there), if you have enough other income / savings to live on. I think the figures are roughly that every 9 weeks deferral adds a bit to the pension, and the increase get inflation increases when you stop deferring. There is now no added benefit for a partner by doing this but it adds I think something like 5.8% of the pension amount for every year deferred.

Albermarle

happybagger said:

Dazed_and_C0nfused said:

True.

Remember the 3rd year only adds £0.98/week.

Probably still worth it but not as good value as the first two!

Is there a formula for this sort of thing? ie how much each of the latter years adds?
I'm showing as 82.3% of the maximum, with 27 of 35 years complete (although last year not yet accounted for).
Annoyingly one year in the 1990s shows as "we're still checking", I was self employed paid class 2 and 4 but have no records now

Currently I'm just contributing as low-earnings self employed vis Class 2, no Class 4

Much easier just to call these people, and they can access your records and advise on the best way to top up your state pension, if needed.
Contact the Future Pension Centre - GOV.UK (www.gov.uk)