Passive income

NoMore

 My feeling is adding more lump sum money ( without the tax benefit ) is still useful because hopefully the fund (and the cost) will grow after a 10 year period before i draw on it.

With no tax advantage without tax relief, your better just putting the extra money into an ISA.

Linton

Thumbs_Up said:

Secret2ndAccount said:

 you are allowed to put in 2880 which gets 720 tax relief added, making a total of 3600.
It is legally permitted to pay in more than this, but you won't get any tax relief. So in 99% of cases it would be a bad idea. Many pension providers are not set up to deal with such excess contributions.

This bit interest me, i have no salary wage income and contribute £2880 to my Vanguard SIPP. I did message Vanguard about me possibly adding more money to the pot, i can't remember the answer, but it was vague. My feeling is adding more lump sum money ( without the tax benefit ) is still useful because hopefully the fund (and the cost) will grow after a 10 year period before i draw on it.

You normally put in £2880.  This is increased by HMRC to £3500.  I(f you have other income greater than your tax alowance you could be paying tax on the £3500 when you withdraw it still making a small tax gain on the £2880 because of the 25% tax free,

But if you have no earnings and pay more into a pension than the £2880 you dont get the tax relief but you could get taxed when you withdraw and so make a tax loss on the deal.  In these circumstances you would be better off putting the money into an ISA.

Secret2ndAccount

michaels said:

a) you expected to withdraw them without paying tax (ie your total income during drawdown would be less than the personal tax allowance) and

b) You had filled your isa allowance and/or
3) The reduction in income assessed for certain benefits gave you an entitlement that you would not otherwise have

4d) You were trying to protect the money from IHT (might or might not work)
5e) Your contributions were matched by an employer, and you didn't want to miss out on the free money