Age 62 new pension ?

QrizB

In which case Mrs MOD could also be contributing £2880 to a pension and receiving the £720 tax relief.

If she is over 55 and has unused Personal Allowance she might want to start drawing from her pension while she can get it out without paying income tax on it.

MouldyOldDough

@QrizB

From my FA :

Where you might have to be careful is in respect of the recycling rules which state that tax free cash from a pension cannot be dumped straight back into a pension and obtain tax relief, so we would need to prove that the funds being paid back into the pension came from either earned income on which has been subject to tax ( irrespective of whether or not you have actually paid tax on it) or from another source.

Note Benefits means tested or not are not usually allowed as Pensionable

QrizB

MouldyOldDough said:

@QrizB

From my FA :

Where you might have to be careful is in respect of the recycling rules which state that tax free cash from a pension cannot be dumped straight back into a pension and obtain tax relief, so we would need to prove that the funds being paid back into the pension came from either earned income on which has been subject to tax ( irrespective of whether or not you have actually paid tax on it) or from another source.

Note Benefits means tested or not are not usually allowed as Pensionable

In my considered opinion, your FA is incompetent.
How much are you paying them? You should ask for a refund.

MouldyOldDough

My FA assumes that I would arrange it all through him ?

LHW99

The general point the FA makes - that there are recycling rules - is not wrong. However you are (I think) talking about adding something like £2880 to a pension.

Many people withdrawing their pensions do similar, as do those with low earned income (below the £3600 gross level).

It is also unnecessary to use an FA to set up a small personal pension / SIPP, or to add money to a workplace pension.

Is the person an IFA? If truly an FA then actually a salesperson, whose bonus is likely to depend on how much business they bring in.

MouldyOldDough

LHW99 said:

The general point the FA makes - that there are recycling rules - is not wrong. However you are (I think) talking about adding something like £2880 to a pension.

Many people withdrawing their pensions do similar, as do those with low earned income (below the £3600 gross level).

It is also unnecessary to use an FA to set up a small personal pension / SIPP, or to add money to a workplace pension.

Is the person an IFA? If truly an FA then actually a salesperson, whose bonus is likely to depend on how much business they bring in.

Not adding to a pension - starting a new pension - would this affect any existing arrangement ?

Our FA is not independent - he works for an investment company now !

I currently have four seperate ex-government/ Local Authority pensions being paid in the form of IHR !

Say I do ignore him and open my own SIPP - Do I have to make any decision as to the investment made ?

And in any case - I would not use pension funds or benefits to fund this - I would use savings (redundancy) that have previously been subject to tax - and I do have the paperwork to prove this from 16 years ago !

Dazed_and_C0nfused

MouldyOldDough said:

LHW99 said:

The general point the FA makes - that there are recycling rules - is not wrong. However you are (I think) talking about adding something like £2880 to a pension.

Many people withdrawing their pensions do similar, as do those with low earned income (below the £3600 gross level).

It is also unnecessary to use an FA to set up a small personal pension / SIPP, or to add money to a workplace pension.

Is the person an IFA? If truly an FA then actually a salesperson, whose bonus is likely to depend on how much business they bring in.

Not adding to a pension - starting a new pension - would this affect any existing arrangement ?

Our FA is not independent - he works for an investment company now !

I currently have four seperate ex-government/ Local Authority pensions being paid in the form of IHR !

Say I do ignore him and open my own SIPP - Do I have to make any decision as to the investment made ?

And in any case - I would not use pension funds or benefits to fund this - I would use savings (redundancy) that have previously been subject to tax - and I do have the paperwork to prove this from 16 years ago !

You don't have to invest the money, you could leave it as cash within the SIPP.  Although that brings the risk of losing value to inflation.

molerat

£2880 is well outside any scope for triggering recycling rules, there are no checks on that sort of contribution.  Many of us retired do the £2880 in £3600 out dance every year keeping the funds in cash as it is a quick profit of at least £180, a minimum 6.25% return, for putting the money away for a couple of months.  If you are below the tax threshold then that return can be as high as 25%.  Unlikely anything a FA would be interested in as there is nothing in it for them.

LHW99

And starting a new pension won't affect any existing pensions, although you would need to keep a record of the tax-free lump sums (PCLS) from each, as you would have to inform the SIPP company when you come to take money out of the PP / SIPP, as those count towards the £268k total tax-free amount you are allowed.

If you want to keep it as cash, I believe Hargreaves Lansdown (HL) don't charge fees (currently) on SIPPs if there is only cash.