Setting up a SIPP - help please

Albermarle

On my payslip my taxable pay is my gross pay minus the pension contribution. So the method is net pay if I'm understanding this correctly.

Yes it sounds like a net pay arrangement and not salary sacrifice.

The max of £3600 gross contributions only applies when you have no taxable income in this tax year ( or less than £3600) 

As you will have a higher income than that in 22/23 tax year than that you can contribute more. The fact you are not actually earning now, is not relevant.

Scrounger

It may be of interest that Fidelity currently have a £25 cashback offer (until 12 Sept) if you invest £2,500 or more in a new SIPP:

http://www.fidelity.co.uk/offer25/?intcmp=hero1_other_offer-25_aug_2022#get-cashback-when-you-invest

Add cash before 6 Sept and you should see the tax relief added by 22 Oct.

Then perhaps withdraw the lot as a 'small pot' withdrawal - all for free!

Repeat next year. 

Scrounger

Albermarle

Scrounger said:

It may be of interest that Fidelity currently have a £25 cashback offer (until 12 Sept) if you invest £2,500 or more in a new SIPP:

http://www.fidelity.co.uk/offer25/?intcmp=hero1_other_offer-25_aug_2022#get-cashback-when-you-invest

Add cash before 6 Sept and you should see the tax relief added by 22 Oct.

Then perhaps withdraw the lot as a 'small pot' withdrawal - all for free!

Repeat next year. 

Scrounger

I do not think it is wise to make financial decisions on the basis of a 1% cashback offer. By the time the tax relief arrived it could have dropped in value a lot more than 1% ( or gained) In any case it says this in the T's & C's
If within 12 months of making your investment, you cancel your regular savings plan, move your assets to another provider or withdraw your qualifying lump sum investment leaving less than the £2,500 minimum value required, Fidelity reserves the right to reclaim the £25 payment made to you as part of this Offer. 

Scrounger

Albermarle said:

Scrounger said:

It may be of interest that Fidelity currently have a £25 cashback offer (until 12 Sept) if you invest £2,500 or more in a new SIPP:

http://www.fidelity.co.uk/offer25/?intcmp=hero1_other_offer-25_aug_2022#get-cashback-when-you-invest

Add cash before 6 Sept and you should see the tax relief added by 22 Oct.

Then perhaps withdraw the lot as a 'small pot' withdrawal - all for free!

Repeat next year. 

Scrounger

I do not think it is wise to make financial decisions on the basis of a 1% cashback offer. By the time the tax relief arrived it could have dropped in value a lot more than 1% ( or gained) In any case it says this in the T's & C's
If within 12 months of making your investment, you cancel your regular savings plan, move your assets to another provider or withdraw your qualifying lump sum investment leaving less than the £2,500 minimum value required, Fidelity reserves the right to reclaim the £25 payment made to you as part of this Offer. 

Why would the £2880 (£3600 with TR) held in cash drop in value?

IME, Fidelity don't usually worry about reclaiming any incentives paid out. 

Win-win.


Scrounger

Albermarle

Scrounger said:

Albermarle said:

Scrounger said:

It may be of interest that Fidelity currently have a £25 cashback offer (until 12 Sept) if you invest £2,500 or more in a new SIPP:

http://www.fidelity.co.uk/offer25/?intcmp=hero1_other_offer-25_aug_2022#get-cashback-when-you-invest

Add cash before 6 Sept and you should see the tax relief added by 22 Oct.

Then perhaps withdraw the lot as a 'small pot' withdrawal - all for free!

Repeat next year. 

Scrounger

I do not think it is wise to make financial decisions on the basis of a 1% cashback offer. By the time the tax relief arrived it could have dropped in value a lot more than 1% ( or gained) In any case it says this in the T's & C's
If within 12 months of making your investment, you cancel your regular savings plan, move your assets to another provider or withdraw your qualifying lump sum investment leaving less than the £2,500 minimum value required, Fidelity reserves the right to reclaim the £25 payment made to you as part of this Offer. 

Why would the £2880 (£3600 with TR) held in cash drop in value?

IME, Fidelity don't usually worry about reclaiming any incentives paid out. 

Win-win.


Scrounger

Fair enough on both points, but still not sure £25 would/should  incentivise people to do this. Would just be a bonus if you were going to do it anyway. 
Now if you were talking about Fidelity's transfer cashback offer, then you have some more interesting figures.

Scrounger

Remember its a possible gain of £720 + £25 = £745 free cash!

And not many platform will allow you to open & close SIPPs willy-nilly and without any penalties (HL for instance).

Just based on my personal experience.


Scrounger

greenleaves70

Scrounger said:

Remember its a possible gain of £720 + £25 = £745 free cash!

And not many platform will allow you to open & close SIPPs willy-nilly and without any penalties (HL for instance).

Just based on my personal experience.


Scrounger

Thanks for the suggestion.

Scrounger

@greenleaves70, you're welcome.

Another advantage of small pots withdrawal is PAYE is always a flat 20% rather than emergency tax. Plus no impact on annual allowance and lifetime allowance.


Scrounger