Can I pay into a SIPP

dunstonh

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are charges on a savings account.   The difference is implicit charges vs explicit charges.

Dazed_and_C0nfused

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

You could have the money in ISA earnings 4-5% for say 10 months and then add it to the pension and get the 6.25% as well.

It doesn't need to be in the pension long if you don't want it to be.

Cariad71

molerat said:

There usually are no charges for the £2880 in £3600 out cash only SIPP.  Plus you get interest for the time the cash is sitting there - currently 3.25% AER with HL - but will be taxed on withdrawal in the usual 25%/75% way.

Wow! Even better!

Cariad71

Albermarle said:

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are usually charges for ISA's as well.

I’ve never paid fees to open/run an isa.

bjorn_toby_wilde

Cariad71 said:

Albermarle said:

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are usually charges for ISA's as well.

I’ve never paid fees to open/run an isa.

That will be Cash ISAs. Stocks and Shares ISAs normally have charges.

dunstonh

Cariad71 said:

Albermarle said:

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are usually charges for ISA's as well.

I’ve never paid fees to open/run an isa.

yes you have.   You just havent had them disclosed to you.     Typically, the implicit charges on savings accounts are higher than the explicit charges on investments.

Moonwolf

dunstonh said:

Cariad71 said:

Albermarle said:

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are usually charges for ISA's as well.

I’ve never paid fees to open/run an isa.

yes you have.   You just havent had them disclosed to you.     Typically, the implicit charges on savings accounts are higher than the explicit charges on investments.

I bet you are right although implicit charges are often spread across a business rather than just paid by the person operating the account.  The main one would be the spread between interest or growth the bank receives and what is paid is one of the income streams, however this is usually higher in static accounts than ones actively switched by the customer.   Also they tend to be a lower percentage the more you have in savings.

The thing about that sort of charge is the regulars on these forums probably pay a lot less in implicit charges than an ordinary member of the public. 

Albermarle

Cariad71 said:

Albermarle said:

Cariad71 said:

Stringybob3 said:

If your current pension and rent already put you into the basic tax rate, then the benefit in doing this would equate to £180/year (£900 tax free and then £2160 after tax for the remaining). You would therefore need to consider any SIPP charges to see if it is worthwhile doing

Yes- I’m a basic rate tax payer. I’m just thinking that paying into a SIPP (6.25% uplift) is better than paying into an ISA at 4-5% But I didn’t realise that there are charges associated with a SIPP. Thank you 

There are usually charges for ISA's as well.

I’ve never paid fees to open/run an isa.

It is possible nowadays to have a S&S ISA with low/zero fees for the platform ( not for the investments of course) but most mainstream providers will have a charge,