advice on regular payments into a SIPP please

DRS1

To be fair you didn't mention selling £2k pm of the HSBC fund in your previous post. Nor did you mention the £8k second DB pension. Those two things alter your figures quite a bit.

I am no financial planner but back of the envelope figures suggest

Year 1 (64) Want £36k have £15k DB need £21k from SIPP.

Year 2 (65) Want £36k (maybe you want to increase that for inflation?) have £23k from 2DBs need £13k from SIPP

Year 3 (66) same as year 2.

Year 4 (67) SP kicks in and maybe you don't need any more from SIPP.

So that is 21k + 13k + 13k = 47K

If you take £2k pm from the HSBC fund for 2 years (62 to 64) and put it in SMFF that is £48k so enough to cover what you want without the £100pm new contributions.

But maybe you want to allow for inflation on top of the £36k (and maybe the DB pensions increase by inflation or part inflation).

Marcon

This thread has been running for two years and has now reached 21 pages. I haven't read them, so this may well have been suggested (and rejected!) before, but wouldn't some proper financial advice be a good investment? From the look of the most recent answers, you've drip fed information - which is what many people do on this forum - and that is pretty much a guarantee that you won't get the most helpful, or even accurate, responses; because nobody has all the relevant facts.

Some 'free advice' can prove very expensive indeed.

sadexpunk

To be fair you didn't mention selling £2k pm of the HSBC fund in your previous post. Nor did you mention the £8k second DB pension. Those two things alter your figures quite a bit.

yes apologies, i only remembered the smaller DB after id posted. fancy forgetting about a DB pension (albeit a small one), nice mistake to make tho :-)

Year 1 (64) Want £36k have £15k DB need £21k from SIPP.

Year 2 (65) Want £36k (maybe you want to increase that for inflation?) have £23k from 2DBs need £13k from SIPP

Year 3 (66) same as year 2.

Year 4 (67) SP kicks in and maybe you don't need any more from SIPP.

So that is 21k + 13k + 13k = 47K

If you take £2k pm from the HSBC fund for 2 years (62 to 64) and put it in SMFF that is £48k so enough to cover what you want without the £100pm new contributions.

yep, i come up with the same figures, so good to see that confirmation, but…. are there any tax implications? or are there none because the withdrawals are all staying within the SIPP itself?

and yes, probably makes more sense to keep up the £100 contributions to HSBC fund for (hopeful) growth).

wouldn't some proper financial advice be a good investment? From the look of the most recent answers, you've drip fed information - which is what many people do on this forum - and that is pretty much a guarantee that you won't get the most helpful, or even accurate, responses; because nobody has all the relevant facts.

Some 'free advice' can prove very expensive indeed.

yes i understand that, however ive been most appreciative of the advice ive been given, i guess many on here are at least as financially savvy as some financial advisors. i did initially take some proper financial advice on which pensions to leave alone (DB) and which were underperforming (workplace DCs) which prompted me to ask on here about consolidating them and moving them into a SIPP. so the advice ive been given on here is in the main hand-holding on how to actually do things that ive decided on doing, or generic advice on strategies or tax implications say.

thank you

MallyGirl

changing the investments within the SIPP has no tax implications.

DRS1

yep, i come up with the same figures, so good to see that confirmation, but…. are there any tax implications? or are there none because the withdrawals are all staying within the SIPP itself?

OK The danger of taking any notice of an idiot like me.

First. No, the withdrawals are not staying in the SIPP. You are taking that money out of the SIPP to live off it. And you are right if you withdraw £21k or £13k in a year from your SIPP you need to think about tax. It depends how you withdraw it of course.

Maybe you take it all as a tax free lump sum. If so no tax.

Or you take it as UFPLS. If so 25% is tax free and 75% is taxable under PAYE so how much tax gets deducted will depend on your tax code and other income sources (like the DB pensions which may use up all your personal allowance).

Or you use FAD in which case you may be taking some tax free lump sum and some amount as taxable pension income which to start with could be zero or much less than 75% of the withdrawal depending on how you structure it - but later you may be taking 100% of any withdrawal as taxable pension when you have run out of tax free lump sums.

Second Quite separately from the pension tax questions I should have asked what the £36k figure was (a gross amount or a net of tax amount). I treated the £36k desired income as a gross figure. If it is a net of tax figure then you would need to gross it up by whatever your effective tax rate is. That may not be 20% even if you are a basic rate taxpayer because of things like the personal allowance.

sadexpunk

First. No, the withdrawals are not staying in the SIPP. You are taking that money out of the SIPP to live off it. 

i think we may be at cross purposes here, i was talking about the withdrawals from HSBC fund to the STMFF, which i now believe isnt subject to tax as its staying within the SIPP itself. obviously on proper withdrawal to my pocket from the age of 64 then it will be subject to tax. thats right isnt it?

 I should have asked what the £36k figure was (a gross amount or a net of tax amount). I treated the £36k desired income as a gross figure. If it is a net of tax figure then you would need to gross it up by whatever your effective tax rate is. That may not be 20% even if you are a basic rate taxpayer because of things like the personal allowance.

its net. i want the same amount in my hand as i get in my hand now, so we live the same lifestyle. so yes ill need to ensure theres enough in the STMFF Bucket 1 to give me £36,000 net.

thank you

DRS1

i think we may be at cross purposes here, i was talking about the withdrawals from HSBC fund to the STMFF, which i now believe isnt subject to tax as its staying within the SIPP itself. obviously on proper withdrawal to my pocket from the age of 64 then it will be subject to tax. thats right isnt it?

Oh OK. Personally I would not have called switching investments (selling fund A to buy fund B) a withdrawal. But @MallyGirl picked up that that was what you meant. As she says switching investments within the SIPP has no tax implications.

As to the withdrawals FROM the SIPP and their tax treatment well I covered that already in my answer to the question you didn't actually ask.