Lump sums - are we doing the right thing

Albermarle

Ewan_Kerr said:

Another lesson please:

On checking out SIPPs it would appear that only 100% of my UK relevant earnings will receive tax relief ie my wages (I intend to put my whole wage in as I can live off my existing pension for now). 

Although I can add lump sum contributions, they do not receive tax relief. So why would I put my 'lump sum' in a SIPP and not in an ISA? At the end of the day, when withdrawing from a SIPP, 75% of the total is taxed whereas an ISA is not taxed.

Thanks for your patience.

So if you earn £25 K pa ( for example), you can add £20K to a SIPP and the provider would add £5K tax relief.
There is no point adding any more as you would not get tax relief.
In fact you would get tax relief as it is added automatically but at some point you would have to pay it back again.
You could add the £20K however you like during the tax year, by regular contributions or lump sums.