Pensions transfer, SIPP & ISA

Albermarle

I thought I could take the 25% lump sum just once when I start my pension. How did you get to the figure of £4190 *each* year? 

With a more modern pension, you can take the tax free cash in stages. Either on its own, or with some taxable income at the same time.

LHW99

RobieTheRobot said:

LHW99 said:

Does your wife have any pension? Its usually best to plan things by considering what you both have.

Have you both checked what state pension you will get? One thing you could do with some money from your SIPP may be to top up any gaps in your / her NI years (if there are any) as you usually make back the cost in 3 or 4 years.

Thanks for your comments.

Sadly, she doesn't have much (extremely little pension) for when she worked. Due to ill health she hasn't been working for past 5 years and before that it was intermittent part-time contracting work. 

I will check up on NI contributions for both of us.

Important then to check your state pensions, and make up as much as you can, if appropriate (if you post details on here, people will help work out what's best value as not all years actually give you more because of the change in 2016).

Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

RobieTheRobot

Albermarle said:

I thought I could take the 25% lump sum just once when I start my pension. How did you get to the figure of £4190 *each* year? 

With a more modern pension, you can take the tax free cash in stages. Either on its own, or with some taxable income at the same time.

Thank you for the clear response.

RobieTheRobot

You say:
Important then to check your state pensions, and make up as much as you can, if appropriate (if you post details on here, people will help work out what's best value as not all years actually give you more because of the change in 2016).

Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

I have checked the state pensions.

In my case, it will be £223.69 a week. I cannot improve my forecast any more. I get it from May 2027.
In my wife's case, it will be £190.07. She can contribute more if she works but it seems unlikely as ill health prevents her from working. She gets it from 2034.

You say:
Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

Can I take it from my small pension and contribute to both our pensions? I am guessing not. So it must come from ISA or future working income!

Mutton_Geoff

Can I take it from my small pension and contribute to both our pensions? I am guessing not. So it must come from ISA or future working income!

Yes, as mentioned above, the source is irrelevant.

Dazed_and_C0nfused

RobieTheRobot said:

You say:Important then to check your state pensions, and make up as much as you can, if appropriate (if you post details on here, people will help work out what's best value as not all years actually give you more because of the change in 2016).

Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

I have checked the state pensions.

In my case, it will be £223.69 a week. I cannot improve my forecast any more. I get it from May 2027.
In my wife's case, it will be £190.07. She can contribute more if she works but it seems unlikely as ill health prevents her from working. She gets it from 2034.

You say:
Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

Can I take it from my small pension and contribute to both our pensions? I am guessing not. So it must come from ISA or future working income!

Why wouldn't she make voluntary contributions?

Usually a hard to beat investment.

Buying 3 post 2016 years will likely cost no more than £2.5k and add an inflation proofed £716/year to her State Pension.  For potentially 30+ years.

RobieTheRobot

Dazed_and_C0nfused said:

RobieTheRobot said:

You say:Important then to check your state pensions, and make up as much as you can, if appropriate (if you post details on here, people will help work out what's best value as not all years actually give you more because of the change in 2016).

Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

I have checked the state pensions.

In my case, it will be £223.69 a week. I cannot improve my forecast any more. I get it from May 2027.
In my wife's case, it will be £190.07. She can contribute more if she works but it seems unlikely as ill health prevents her from working. She gets it from 2034.

You say:
Don't forget you can put £2880 each year into a SIPP / personal pension for your wife as well as yourself and each of you would then get £720 tax relief added. You can do that until you each reach 75.

Can I take it from my small pension and contribute to both our pensions? I am guessing not. So it must come from ISA or future working income!

Why wouldn't she make voluntary contributions?

Usually a hard to beat investment.

Buying 3 post 2016 years will likely cost no more than £2.5k and add an inflation proofed £716/year to her State Pension.  For potentially 30+ years.

Thanks.

I am not saying she won't voluntary contributions. I am just saying she is not likely to work so the contributions won't come from her salary. We will have to get from my ISA & top up her NI.

RobieTheRobot

UPDATE to this discussion.

I have just phoned one of my pension provider to ask how much can I contribute to this pension even though I am not working and I have started a drawdown income from my lower value 2nd pension.

They tell me that I can contribute up to £10,000 per annum into my larger pension as long as the money is coming from my bank account. This was a surprise since from above msgs, it seemed to be "£2880 each year". 

Please let me know I have got it anything wrong. 
Thanks

QrizB

RobieTheRobot said:

UPDATE to this discussion.

I have just phoned one of my pension provider to ask how much can I contribute to this pension even though I am not working and I have started a drawdown income from my lower value 2nd pension.

They tell me that I can contribute up to £10,000 per annum into my larger pension as long as the money is coming from my bank account. This was a surprise since from above msgs, it seemed to be "£2880 each year". 

Please let me know I have got it anything wrong. 
Thanks

Do you have earnings exceeding £10k pa that you declared to your pension provider but haven't mentioned here?

• If so, they are correctly quoting the new MPAA.
• If not, they seem to have answered the wrong question and the answer is still £2880.

From the second bulllet point link:

The annual allowance is currently £60,000 for most people.

However, you can also only receive tax relief up to 100% of your earnings.

So if your earnings are lower than £60,000 you'll be entitled to tax relief only up to the amount you earn. If you earn less than £3,600, you can pay in up to £2,880 and still get tax relief.

Albermarle

RobieTheRobot said:

UPDATE to this discussion.

I have just phoned one of my pension provider to ask how much can I contribute to this pension even though I am not working and I have started a drawdown income from my lower value 2nd pension.

They tell me that I can contribute up to £10,000 per annum into my larger pension as long as the money is coming from my bank account. This was a surprise since from above msgs, it seemed to be "£2880 each year". 

Please let me know I have got it anything wrong. 
Thanks

You could add up to £10,000, but most of it would not be eligible for tax relief.
Worth noting two problems with this 
1) As you get taxed on withdrawals, then with no tax relief going in, it would not be a very good idea
2) Most pension providers are not able to accept contributions that are not eligible for tax relief.

If you made it clear to the person you spoke to that you had no taxable income, then this should have made  clear to you . However pension call centre staff have varying levels of knowledge/experience.