SIPP or Invest or Just Savings Account ?

Saver101101

Hi,
I am currently 61 and have a SIPP with Lloyds with just over £7000 in it, I put in £160 per Month and they top it up with £40 Tax Relief so £200 a month goes in.

I have set my retirement age at 75 (ambitious I know) but given all the restrictions of when it actually comes to taking the money out, I was wondering if it would be better just to take it out now (I can take it out after 55), and either invest it and still put £200 a way a month, that way I can cash it in easier when I need it, or just put £200 a month away in the highest paying savings account ?.

Any Advice would be appreciated.

cloud_dog

It might help if you could offer some more information about yourself and partner (if relevant).

When do you think you may actually retire, State Pension age?

What other pension investments or benefits do you (and or partner) have?

What other non-pension capital do you have (cash savings, investments etc)?

Have you checked / confirmed you are eligible for the full State Pension benefit?

Importantly, how much income do you think you will need / want on retirement?

Depending on other pension, investment, savings considerations, and assuming tou have no other easily accessible money/savings, it might (???) be worth considering, but there are an awful lot of unknowns in your post at the moment.

Saver101101

https://forums.moneysavingexpert.com/discussion/comment/81874713#Comment_81874713

Sorry, I will expand a bit.

When do you think you may actually retire, State Pension age? - Yes 67/68

What other pension investments or benefits do you (and or partner) have? - Wife also has SIPP, I also have Civil Service Pension and PIP due to Disability.

What other non-pension capital do you have (cash savings, investments etc)?, - Savings and other investments in Shares Etc around £20k

Have you checked / confirmed you are eligible for the full State Pension benefit? - Yes I am, as is my Wife.

Importantly, how much income do you think you will need / want on retirement? - That the difficult bit, I don't really have a clue !.

eskbanker

I think the key thing is to come up with some sort of financial plan, mapping income and expenditure, both before and after retirement, and then decide on how you calibrate your assets in order to achieve that. There seems little point in removing money from a tax-efficient pension many years before you need it, but the decision about saving or investing is also dependent on timescales before use, and you can obviously invest inside or outside the pension wrapper, in the same things.

You mention "that way I can cash it in easier when I need it" - if you have a plan then there shouldn't be any need to access money in a hurry?

LHW99

If you continue putting money into a SIPP you get an "instant" boost from HMRC (depending how quickly your provider gets the refund to you).

I think that works out at ~6.25% for a basic rate taxpayer.

So you could draw down from the SIPP you have, but still continue paying your £200 a month into that or a second SIPP. You can do that until you are 75, and your wife could do the same if as a couple you have additional spare cash.

masonic

Income is another relevant factor when it comes to whether you should take anything out of your SIPP. It would make little sense to do this and pay a higher rate of tax vs waiting if you don't need the money.