Change SIPP plan?

safe_hands2

Hi. I set up a sipp four years ago together with a stocks and shares ISA to fund the gap in income between retiring at 60 and getting most of my pension income at 67. Due to the changes to the TPS, it now looks like I will have a better income from 60 which now means I'll be paying tax on some of the sipp money I've invested. My plan was to reduce the amount of overall tax I would be paying by using the sipp to take me up to the annual allowance and the ISA for income beyond that.

My question is, is it still worth investing in the sipp even though I'll be paying tax on the outputs, or should I load up the ISA as much as possible?

dunstonh

My question is, is it still worth investing in the sipp even though I'll be paying tax on the outputs, or should I load up the ISA as much as possible?

You should load up the pension as much as possible.  Pension beats ISA. Even if it means paying some basic rate tax when you draw it,  If you are a basic rate taxpayer whilst paying in and also when drawing out, then the pension will be 6.25% better than ISA.

SVaz

Plus the Sipp is outside your estate so no IHT ever and if you die before 75, it’s inherited income tax free ( for now).
With an ISA the opposite is true.