Should I open a SIPP? Or any other advice 25 January at 6:05PM in Pensions, annuities & retirement planning 6 replies 352 views

Polly05

Hi.

Just looking to see if people think there's anything else I could be doing or if I'm missing out on anything. 

I'm nearly 40. Normal tax payer. Pay into workplace pension via salary sacrifice. I've always put in as much as they would match, although in the last couple of years I have upped it and put in more than they do.

I also have a S&S LISA for retirement. Planning to put in the max £4k for every year I'm able. Hoping that might let me retire a wee bit early.

I also have a S&S ISA. Again, might help with early retirement.

Is there anything else I can be doing? Should I open a SIPP? Although I don't really understand what they are and that scares me a bit..

Thoughts? 

Marcon

Polly05 said:

 Should I open a SIPP? Although I don't really understand what they are and that scares me a bit..

Why do you think you ought to open a SIPP, particularly as you don't understand what a SIPP is?

If you've got a workplace pension, why not pay more into that? You may not be able to pay as much as you want to using salary sacrifice (if doing so takes you below minimum wage), but you can always make personal contributions and get the same tax relief. You won't get the benefit of any NI saving but you wouldn't get that if you paid into a SIPP.

Pat38493

Things to consider

- Unless you are hoping to retire before you reach the age where you can access your pension, there is probably no reason  to use and  S&S ISA rather than simply increasing your pension contributions even more - that way you get the tax relief on the pension contributions as well as the growth being tax free.

- You may want to review how your pension fund is invested within the pot (if you have any individual choice about it) and make sure you are happy with it.  Quite often with modern schemes you can control how the money is invested and it will be invested in the employer's default options.  For most people the default fund should be ok but post the information here it you want comments.  

It's unlikely you would need to open a SIPP at this stage unless you have reason to believe your employer scheme is poorly invested ^^ 

Albermarle

A SIPP, and a typical workplace pension are actually very similar. The only difference being that the SIPP will have more investment choice, but for the large majority that is probably more of a disadvantage than anything.

Polly05

Ahh ok thanks. Yes, I moved out of the default choice a year or so ago and into a different fund that seems to be performing better. 
Yes, hoping to use the ISAs for early retirement (before taking workplace pension). 

Qyburn

Are you hoping to retire before the age at which you can access a private pension? That would be one good reason to put retirement savings into an ISA instead of pension.
I can't think of many more, maybe if you're currently not paying tax, but expect to pay higher rate in retirement. Or if you want to save more than the pension annual limits.

Polly05

Yes hoping to use the ISAs to retire a bit earlier than I can access the pension...