Paying into SIPP when workplace pension is DB

nell_wen

Dazed_and_C0nfused said:

nell_wen said:

Yorkie1 said:

If you want to invest in stocks and shares still, then had you thought about AVCs through the civil service? There will be a default fund based on when they think you will reach normal pension age for alpha (currently 67 for many people) but you can choose other funds. Your contribution is taken off before tax, and no need to start calculating PIA etc.

I did think about that option, and it would definitely be more straightforward in terms of working out the numbers. However at the moment I’m thinking I’d prefer to keep my work pension as simple as possible and have a separate SIPP. I will have another read of the info on the AVC option though as I’ve not properly looked at it.

They are separate though.

Your Alpha(?) pension is a defined benefit scheme.

The AVC's would create a defined contribution pot, similar to a SIPP.

True. The AVC option would be easier straight away, although I believe I couldn't continue to contribute after learning my role, which makes sense. 

Food for thought, and I need to do a bit of research on L&G investment options. 

Thanks 

SimonSeys

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

nell_wen

SimonSeys said:

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

Thanks!

Problem is it's not MyCSP anymore, and my request for a pension saving statement (albeit I didn't ask for the previous years allowances) I think is probably lost in the ether.

I agree that I have plenty of headroom that I can put into AVCs or SIPP, I just need to make a decision! Research and reading for the weekend...

SarahB16

nell_wen said:

SimonSeys said:

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

Thanks!

Problem is it's not MyCSP anymore, and my request for a pension saving statement (albeit I didn't ask for the previous years allowances) I think is probably lost in the ether.

I agree that I have plenty of headroom that I can put into AVCs or SIPP, I just need to make a decision! Research and reading for the weekend...

Can you take the AVC tax free (subject to HMRC limits)? Some AVCs you can. If you can then I'd focus on the AVCs and then in a few years add to the SIPP.   

nell_wen

SarahB16 said:

nell_wen said:

SimonSeys said:

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

Thanks!

Problem is it's not MyCSP anymore, and my request for a pension saving statement (albeit I didn't ask for the previous years allowances) I think is probably lost in the ether.

I agree that I have plenty of headroom that I can put into AVCs or SIPP, I just need to make a decision! Research and reading for the weekend...

Can you take the AVC tax free (subject to HMRC limits)? Some AVCs you can. If you can then I'd focus on the AVCs and then in a few years add to the SIPP.   

Yes. If I understand correctly, it’s basically like a normal DC pension. Based on what I’ve read, I’m tending towards just going with the AVC option as it’s simpler. As long as once I’m 57 I can withdraw from the AVC pot without putting my main civil service DB pension into payment until a later date it will do what I’m after.

DRS1

nell_wen said:

SarahB16 said:

nell_wen said:

SimonSeys said:

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

Thanks!

Problem is it's not MyCSP anymore, and my request for a pension saving statement (albeit I didn't ask for the previous years allowances) I think is probably lost in the ether.

I agree that I have plenty of headroom that I can put into AVCs or SIPP, I just need to make a decision! Research and reading for the weekend...

Can you take the AVC tax free (subject to HMRC limits)? Some AVCs you can. If you can then I'd focus on the AVCs and then in a few years add to the SIPP.   

Yes. If I understand correctly, it’s basically like a normal DC pension. Based on what I’ve read, I’m tending towards just going with the AVC option as it’s simpler. As long as once I’m 57 I can withdraw from the AVC pot without putting my main civil service DB pension into payment until a later date it will do what I’m after.

I have a feeling that @SarahB16 was thinking of schemes like the LGPS or USS where you take the AVC at the same time as the DB pension and get a TFLS which is a multiple (6.66 times when you include the AVC) of the DB pension.  This can allow the whole of the AVC pot to be taken as TFLS (depending on the figures) not just 25% of it.  I am not sure that applies to the CSP.

nell_wen

DRS1 said:

I have a feeling that @SarahB16 was thinking of schemes like the LGPS or USS where you take the AVC at the same time as the DB pension and get a TFLS which is a multiple (6.66 times when you include the AVC) of the DB pension.  This can allow the whole of the AVC pot to be taken as TFLS (depending on the figures) not just 25% of it.  I am not sure that applies to the CSP.

Right, yes! It does get (even more) confusing when various public sector schemes do the same but different things!

I’m actually not planning to take a tax free lump sum. At least with current plans I’ll take £1000 per month from the AVC pot and the remainder of my living expenses from ISAs, and see how far that gets me!

DRS1

nell_wen said:

DRS1 said:

I have a feeling that @SarahB16 was thinking of schemes like the LGPS or USS where you take the AVC at the same time as the DB pension and get a TFLS which is a multiple (6.66 times when you include the AVC) of the DB pension.  This can allow the whole of the AVC pot to be taken as TFLS (depending on the figures) not just 25% of it.  I am not sure that applies to the CSP.

Right, yes! It does get (even more) confusing when various public sector schemes do the same but different things!

I’m actually not planning to take a tax free lump sum. At least with current plans I’ll take £1000 per month from the AVC pot and the remainder of my living expenses from ISAs, and see how far that gets me!

Yes discussions on here suggest the commutation rate for the TFLS under the CSP is not at all good so plenty of people say don't take the TFLS (or take the minimum amount).  Before reading this forum it never occurred to me that anyone would reject a tax free lump sum.

It may be worth exploring whether you can take that £1000 a month from the AVC pot with some of it being tax free lump sum (the way you could take an UFPLS payment from a SIPP).

SarahB16

DRS1 said:

nell_wen said:

SarahB16 said:

nell_wen said:

SimonSeys said:

Hi, I’m a civil servant who has also contributed into a SIPP.

Remember that you can carry over unused allowances from previous years.  Given high inflation last year, I have a large amount of unused allowances from for 2024-25, and I suspect you have the same. 

If you email pss@mycsp.co.uk they will (eventually) send you a pension saving statement for 2024-25 and previous years which will tell you the amount if any unused allowances.  

I suspect you will be well within the £60k annual allowance.  The biggest factor affecting your contribution will be taxable pay.  

Thanks!

Problem is it's not MyCSP anymore, and my request for a pension saving statement (albeit I didn't ask for the previous years allowances) I think is probably lost in the ether.

I agree that I have plenty of headroom that I can put into AVCs or SIPP, I just need to make a decision! Research and reading for the weekend...

Can you take the AVC tax free (subject to HMRC limits)? Some AVCs you can. If you can then I'd focus on the AVCs and then in a few years add to the SIPP.   

Yes. If I understand correctly, it’s basically like a normal DC pension. Based on what I’ve read, I’m tending towards just going with the AVC option as it’s simpler. As long as once I’m 57 I can withdraw from the AVC pot without putting my main civil service DB pension into payment until a later date it will do what I’m after.

I have a feeling that @SarahB16 was thinking of schemes like the LGPS or USS where you take the AVC at the same time as the DB pension and get a TFLS which is a multiple (6.66 times when you include the AVC) of the DB pension.  This can allow the whole of the AVC pot to be taken as TFLS (depending on the figures) not just 25% of it.  I am not sure that applies to the CSP.

Thank you @DRS1 for the additional clarity re my post and yes that was what I was referring to.    

Yorkie1

Looking at my AVC scheme guide from 2023:

• You can take it from pension age (55 for me, will rise to 57 I think in the next year or two) regardless of whether you are still working in the CS or have accessed any other pension savings (so you don't need to take it at the same time as alpha etc)
• They assume a retirement age of 67 but you can change this
• You can choose which fund to invest in - there's a default lifestyling fund based on your assumed retirement age

The available options:

• Take all of it, of which 25% will be tax free
• Take it as a number of lump sums
• Take a regular income from it
• Get a guaranteed income (an annuity)
• A combination of options