Standard Life top up

Bolt1234

Hi All,  I used to work for BT for over 30 years in a middle management position.  I am early 60’s and working part time for a different company.   am a sole trader and my current employer does not pay into a pension scheme (it’s fine this way btw). With this part time salary and the other part of my BT pension I am earning just a smidge over £50k.  I have also come into an inheritance recently so can afford to put some money into my Standard  Life pension which currently has £30k in.  

BT had a defined benefit pension and then in the last approx 10 years it moved to Standard Life.  I took the defined benefit element when I left BT and have done for 3 years.  I havent touched or even took much notice of the Standard Life as I understand the best age to take is 65.

Could anyone advise?  I have a IFA but would rather have some general knowledge of what is what before I approach them.

Could I reduce my salary to below £50k by making contributions into Standard Life.  Maybe even significant amounts that can then be taken out at 65?  


Please go slow with me and thank you in advance.

Albermarle

BT had a defined benefit pension and then in the last approx 10 years it moved to Standard Life.  I took the defined benefit element when I left BT and have done for 3 years.  I havent touched or even took much notice of the Standard Life as I understand the best age to take is 65

The SL pension is a Defined Contribution pension. Basically a pot of money that is normally invested in the financial markets. You could have started taking at at age 55, but obviously if you did not need it then better to have left it where it is. You can leave it there until you die if you like and pass it on as an inheritance

You can buy an annuity with it or draw it down in stages, or leave it alone. 

Could I reduce my salary to below £50k by making contributions into Standard Life.  Maybe even significant amounts that can then be taken out at 65?  

Yes assuming they will accept new contributions, which is likely. 

With a DB pension and relatively small DC pension, why do you have an IFA?

You may find this site useful as well as reading through the forum.

Pensions and retirement | Help with pensions and retirement | MoneyHelper

Bolt1234

Thank you.  I have an IFA because I had a significant inheritance as well as the pensions and am still working.

i presume that anything I put into SL will reduce my overall earnings of £50k pa

Dazed_and_C0nfused

Bolt1234 said:

Thank you.  I have an IFA because I had a significant inheritance as well as the pensions and am still working.

i presume that anything I put into SL will reduce my overall earnings of £50k pa

If the Standard Life pension is a SIPP or personal pension that you will be contributing to separately from an employment then the contributions will be made using the relief at source method and they don't reduce your taxable income.

But they do get 25% added by the pension company and the gross contribution increases your basic rate band so the overall impact, from reducing income taxed at 40% can be the same.

For example if you give Standard Life £2,000 they will add £500 giving you a pension fund of £2,500.

And your basic rate band gets increased from £37,700 to £40,200 (you need to include the details of these contributions on your tax return).

dunstonh

Bolt1234 said:

Thank you.  I have an IFA because I had a significant inheritance as well as the pensions and am still working.

i presume that anything I put into SL will reduce my overall earnings of £50k pa

If that IFA is handling other investments, then it is likely that they will be able to improve the terms compared to the SL pension unless the SL pension is already heavily discounted.