Sole Trader - ISA or Pension HELP ..

LHW99

[Deleted User] said:

Dazed_and_C0nfused said:

[Deleted User] said:

Thanks again for all the advice and information; it is much appreciated. 

I really made a mess of it all, but it's my own fault, especially since I opened an AJ Bell SIPP account 2 years ago and

 never got around to using it.

Does the payment to a pension need to be made during the tax year when the profit was made? 

The issue is that I am unable to figure out what my exact profit will be until after the TAX year, as my income fluctuates week to week (I restore antiques/musical instruments) and has been as low as £17k and as high as £40k in the last 10 years.

Currently, I am just finishing my 2023-24 self-assessment tax return, and it's around £25k taxable (after mileage allowances, costs, but not including bank interest). So, has this year gone as far as contributing to a pension?

My State pension is for a forecast of a full state pension.

Thanks again 

Last tax years profit is of no relevance.

You will need to estimate as best as you can what your profit will be in the current tax year to know how much you can contribute between now and 5 April 2025.

You can never back date pension contributions so you have missed the boat as far as 2023-24 is concerned.

Unless you were planning on contributing 100% of your profit you should be able to have a good idea if your contribution will be within the limits or not.

And don't forget you pay the net amount, so if your profit in 2024-25 is expected to be say £28,000 and you want to add £20k to the pension then you give the pension company £16k and they will add £4k (25% of what you pay) to make up the gross contribution of £20k (the £4k is 20% of the gross contribution).

  Would a SIPP through Fidelity be suitable ?

I really made a mess of it all, but it's my own fault, especially since I opened an AJ Bell SIPP account 2 years ago and

 never got around to using it.

If the account is still open, AJ Bell is a perfectly good provider / platform, and charges are unlikely to be high whoever you use when you are starting off.