Cash in NS&I Savings Certificates and put money into a SIPP? Sensible or not?

Sun-Is-Fun

Debating if this is a good move or not. Have some NS&I Savings Certificates (approx 30k) that are close to maturing. I realise they are the holy grail of savings accounts that are no longer available and have been great with the high inflation rates we have seen recently, but I have no other funds I could use to pay into my SIPP.

What are people's thoughts on whether I should cash them in and use the money to pay into my SIPP? Financially, is one option better than the other? I have about 5 years, maybe a bit less, to go before I will start drawing from the SIPP. 

Thank you.

MallyGirl

do you earn enough to contribute an additional £20k to the SIPP?

Sun-Is-Fun

MallyGirl said:

do you earn enough to contribute an additional £20k to the SIPP?

I earn approx 15k a year now, part time. 

MallyGirl

you can only get tax relief on (and therefore in practice you can only contribute) up to your gross earned income. That includes employer contributions and anything you have already contributed this tax year. You could get £20k in either side of a tax year end but you would need to get a shift on and do some in March if this is your goal.
You will get tax relief even if you haven't paid much/any tax. That will far outweigh savings rates.

Albermarle

you can only get tax relief on (and therefore in practice you can only contribute) up to your gross earned income. That includes employer contributions and anything you have already contributed this tax year. 

The phrase highlighted in bold is not correct. ( although salary sacrifice contributions that effectively come via the employer muddies the waters a bit) 

Eligibility for tax relief is based solely on a persons earnings.

OP - If you earn £15 K in a tax year , you can add £12K to a pension in total during that tax year, and the provider will add £3K tax relief. 

If you are already contributing regularly to a workplace pension, then you have to also take this into account when working out how much additional contribution you can make.

Secret2ndAccount

MallyGirl said:

You will get tax relief even if you haven't paid much/any tax. That will far outweigh savings rates.

This bit's not very accurate either. National Savings are index linked, and paid over 10% last year. Nonetheless, I do eventually agree that you should withdraw the money and pay the equivalent of your entire salary into a SIPP. Look for a good interest bearing savings account for the rest - e.g. 1 year fix at 4.2%. Then pay the rest into the SIPP in year 2. 
Then you are just left with the question of what to do with the money in the SIPP. Look into CSH2 - Lyxor SONIA ETF. This is low risk, and returns close to the base rate (4%). A good place to keep your money until you want it out.