BR taxpayer whilst earning and when retired - is LISA better value than a SIPP?

strawb_shortcake

I have an Alpha pension and a LISA, I'm unable to fill my LISA every year, but add what I can.
I'm currently a BR tax payer, but suspect in 2 years time I will then be a HR tax payer.

I am also working on the assumption that in retirement I will be a HR tax payer as current pension forecast puts me around  £42k plus state pension. 

I have 8 years left to contribute to my LISA, at which point my children will also be all finished  uni and in theory my ability to save more greatly increased.

As for children, all mine had/have a JISA, sadly I lacked the knowledge I have now and shied away from S&S and they had cash JISAs. Both the older two have access to theirs and neither have spent it, one is treating it as an emergency fund. 
The other (19) is using theirs to set aside for after purchasing a house, they are at uni and with work and student loan currently maxing a LISA for a house deposit, all being well they'll leave uni with a £20k deposit - not all youngsters will spend unwisely.

michaels

strawb_shortcake said:

I have an Alpha pension and a LISA, I'm unable to fill my LISA every year, but add what I can.
I'm currently a BR tax payer, but suspect in 2 years time I will then be a HR tax payer.

I am also working on the assumption that in retirement I will be a HR tax payer as current pension forecast puts me around  £42k plus state pension. 

I have 8 years left to contribute to my LISA, at which point my children will also be all finished  uni and in theory my ability to save more greatly increased.

As for children, all mine had/have a JISA, sadly I lacked the knowledge I have now and shied away from S&S and they had cash JISAs. Both the older two have access to theirs and neither have spent it, one is treating it as an emergency fund. 
The other (19) is using theirs to set aside for after purchasing a house, they are at uni and with work and student loan currently maxing a LISA for a house deposit, all being well they'll leave uni with a £20k deposit - not all youngsters will spend unwisely.

Based on the above, any income that would otherwise incur higher rate tax should be diverted to pension (added alpha or sipp) rather than LISA to minimise tax paid overall (assuming you won't be higher rate taxpayer when retired.

strawb_shortcake

michaels said:

strawb_shortcake said:

I have an Alpha pension and a LISA, I'm unable to fill my LISA every year, but add what I can.
I'm currently a BR tax payer, but suspect in 2 years time I will then be a HR tax payer.

I am also working on the assumption that in retirement I will be a HR tax payer as current pension forecast puts me around  £42k plus state pension. 

I have 8 years left to contribute to my LISA, at which point my children will also be all finished  uni and in theory my ability to save more greatly increased.

As for children, all mine had/have a JISA, sadly I lacked the knowledge I have now and shied away from S&S and they had cash JISAs. Both the older two have access to theirs and neither have spent it, one is treating it as an emergency fund. 
The other (19) is using theirs to set aside for after purchasing a house, they are at uni and with work and student loan currently maxing a LISA for a house deposit, all being well they'll leave uni with a £20k deposit - not all youngsters will spend unwisely.

Based on the above, any income that would otherwise incur higher rate tax should be diverted to pension (added alpha or sipp) rather than LISA to minimise tax paid overall (assuming you won't be higher rate taxpayer when retired.

I'm assuming I will be a higher rate tax payer in retirement, as above my current pension forecast is £42k and doesn't take into account pay rises or promotions. 
I'm trying to balance the next 8 years with enjoying life knowing I have a good pension, on top of my pensions mu Husband will have a full state pension which would result in our retirement income being greater than our income now. 
Once I get to 50 and children are grown, mortgage pretty much nil, my objective will be to manage the gap between finishing work and claiming my pension as I have no desire to work until I'm 68! 

michaels

strawb_shortcake said:

michaels said:

strawb_shortcake said:

I have an Alpha pension and a LISA, I'm unable to fill my LISA every year, but add what I can.
I'm currently a BR tax payer, but suspect in 2 years time I will then be a HR tax payer.

I am also working on the assumption that in retirement I will be a HR tax payer as current pension forecast puts me around  £42k plus state pension. 

I have 8 years left to contribute to my LISA, at which point my children will also be all finished  uni and in theory my ability to save more greatly increased.

As for children, all mine had/have a JISA, sadly I lacked the knowledge I have now and shied away from S&S and they had cash JISAs. Both the older two have access to theirs and neither have spent it, one is treating it as an emergency fund. 
The other (19) is using theirs to set aside for after purchasing a house, they are at uni and with work and student loan currently maxing a LISA for a house deposit, all being well they'll leave uni with a £20k deposit - not all youngsters will spend unwisely.

Based on the above, any income that would otherwise incur higher rate tax should be diverted to pension (added alpha or sipp) rather than LISA to minimise tax paid overall (assuming you won't be higher rate taxpayer when retired.

I'm assuming I will be a higher rate tax payer in retirement, as above my current pension forecast is £42k and doesn't take into account pay rises or promotions. 
I'm trying to balance the next 8 years with enjoying life knowing I have a good pension, on top of my pensions mu Husband will have a full state pension which would result in our retirement income being greater than our income now. 
Once I get to 50 and children are grown, mortgage pretty much nil, my objective will be to manage the gap between finishing work and claiming my pension as I have no desire to work until I'm 68! 

Apologies, should have read more carefully that the 42k was pension not current salary - and that is an impressive amount of alpha

strawb_shortcake

michaels said:

strawb_shortcake said:

michaels said:

strawb_shortcake said:

I have an Alpha pension and a LISA, I'm unable to fill my LISA every year, but add what I can.
I'm currently a BR tax payer, but suspect in 2 years time I will then be a HR tax payer.

I am also working on the assumption that in retirement I will be a HR tax payer as current pension forecast puts me around  £42k plus state pension. 

I have 8 years left to contribute to my LISA, at which point my children will also be all finished  uni and in theory my ability to save more greatly increased.

As for children, all mine had/have a JISA, sadly I lacked the knowledge I have now and shied away from S&S and they had cash JISAs. Both the older two have access to theirs and neither have spent it, one is treating it as an emergency fund. 
The other (19) is using theirs to set aside for after purchasing a house, they are at uni and with work and student loan currently maxing a LISA for a house deposit, all being well they'll leave uni with a £20k deposit - not all youngsters will spend unwisely.

Based on the above, any income that would otherwise incur higher rate tax should be diverted to pension (added alpha or sipp) rather than LISA to minimise tax paid overall (assuming you won't be higher rate taxpayer when retired.

I'm assuming I will be a higher rate tax payer in retirement, as above my current pension forecast is £42k and doesn't take into account pay rises or promotions. 
I'm trying to balance the next 8 years with enjoying life knowing I have a good pension, on top of my pensions mu Husband will have a full state pension which would result in our retirement income being greater than our income now. 
Once I get to 50 and children are grown, mortgage pretty much nil, my objective will be to manage the gap between finishing work and claiming my pension as I have no desire to work until I'm 68! 

Apologies, should have read more carefully that the 42k was pension not current salary - and that is an impressive amount of alpha

This is just a forecast, I need to stick another 20 something years yet...