SIPP v Stocks and Shares ISA

kempiejon

PoGee said:

LHW99 said:

The only other thing worth considering - if you paid extra into your work pension, would the employer also pay in more?

That would be extra "free" money in your pension. Some employers will, some won't.

I'm in the nhs scheme. I used the nhs calculator for an extra £100 each month in pension income, paying 'extra' over 2 years, as I intend to work another 2 years max. The payments would be £844 a month, with a total of £20256 paid over 48 months, or around £19600 as a lump sum. I'd need to live another 18 years to make it worth while but we tend to die young in my family so don't think this would be the way to go about things regarding upping my pension. Might just go the sipp route.

I don't know the specifics of the NHS scheme but would I think it likely that extra £100 per month in pension income to be guaranteed and perhaps increased annually. Is there a survivors pension too?

Any money in a SIPP invested in "the market" changes in value. It takes a specific state of mind to see you £20k investment drop to £15k or £10k and of course it becomes much harder to take £100 from it for 18 years.

PoGee

kempiejon said:

PoGee said:

LHW99 said:

The only other thing worth considering - if you paid extra into your work pension, would the employer also pay in more?

That would be extra "free" money in your pension. Some employers will, some won't.

I'm in the nhs scheme. I used the nhs calculator for an extra £100 each month in pension income, paying 'extra' over 2 years, as I intend to work another 2 years max. The payments would be £844 a month, with a total of £20256 paid over 48 months, or around £19600 as a lump sum. I'd need to live another 18 years to make it worth while but we tend to die young in my family so don't think this would be the way to go about things regarding upping my pension. Might just go the sipp route.

I don't know the specifics of the NHS scheme but would I think it likely that extra £100 per month in pension income to be guaranteed and perhaps increased annually. Is there a survivors pension too?

Any money in a SIPP invested in "the market" changes in value. It takes a specific state of mind to see you £20k investment drop to £15k or £10k and of course it becomes much harder to take £100 from it for 18 years.

I'm single and kids are adults and not dependant on me so I did the online calculation without dependant cover.

PoGee

I think I wouldn't get the additional pension until age 65, which is the normal retirement age for the 2015 scheme. I want to leave at age 60 around 2 months before my 61st birthday.

Dazed_and_C0nfused

PoGee said:

Thanks for replies. I looked at stocks+shares ISA and sipps 4 years back but found it too complicated. It was a 'now I get it's moment, when i looked into them this weekend. Probably a bit late for me but I can advise my kids to set up sipps. One has recently opened up a business and think sipp contributions can be deducted as an expense.

Not if he's self employed they can't.

He would get 25% of his contributions added by the pension company in tax relief and the gross contribution increases his basic rate band.  But they are not a business expense.

It is different if he is operating via a limited company.

LHW99

PoGee said:

I think I wouldn't get the additional pension until age 65, which is the normal retirement age for the 2015 scheme. I want to leave at age 60 around 2 months before my 61st birthday.

You are likely to be able to take a DB pension before NRA, subject to "early retirement factors" - they make a reduction in the monthly / annual pension, to take account of it being paid for more years.

Paying extra into the pension would likely (effectively) offset that reduction to some extent