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  • FIRST POST
    • Roland Flagg
    • By Roland Flagg 19th May 19, 8:55 AM
    • 1,230Posts
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    Roland Flagg
    Help a Numpty understand SIPPs
    • #1
    • 19th May 19, 8:55 AM
    Help a Numpty understand SIPPs 19th May 19 at 8:55 AM
    I'm a non tax payer.
    I pay 240 a month into three Vanguard Funds via HL and get tax relief to top it up to 300.

    I would like to put in more than that, but I take it as a non-tax payer I will not get anymore tax relief? So is it worth putting in more even if I've already maxed out my tax relief, or are there other alternatives?

    I plan to retire in 15 to 17 years, but have a decent amount of savings and house is nearly paid off, so not fully reliant on the Pension.

    I put 80 each (100 with Tax Relief) a month into:
    VLS 80%
    Vanguard Target Retirement 2035 Accumulation
    Vanguard US Equity Index Accumulation

    I think the first two are more predictable (maybe safest?) but the last one is performing best atm.

    Secondly I have about 15k in frozen works pensions that I have transferred over to Pensionbee just for convenience.
    Can I SIPP that to gain extra tax relief?

    Any opinions on whether I'm doing anything majorly wrong would be gratefully received.
    Thanks.
Page 1
    • OldBeanz
    • By OldBeanz 19th May 19, 9:23 AM
    • 854 Posts
    • 666 Thanks
    OldBeanz
    • #2
    • 19th May 19, 9:23 AM
    • #2
    • 19th May 19, 9:23 AM
    Do you have any earned income over 3,600? If so you can pay 80% of that figure (in total) into your SIPP and gain tax relief.
    Your Pensionbee has already gained from tax relief so you cannot re-pension it.
    • dunstonh
    • By dunstonh 19th May 19, 9:59 AM
    • 98,597 Posts
    • 67,050 Thanks
    dunstonh
    • #3
    • 19th May 19, 9:59 AM
    • #3
    • 19th May 19, 9:59 AM
    I would like to put in more than that, but I take it as a non-tax payer I will not get anymore tax relief? So is it worth putting in more even if I've already maxed out my tax relief, or are there other alternatives?
    In your case there doesnt appear to be any justification for exceeding your annual allowance.

    Next in the pecking order is likely to be LISA (if under 40), then S&S ISA and then unwrapped holdings.


    I put 80 each (100 with Tax Relief) a month into:
    VLS 80%
    Vanguard Target Retirement 2035 Accumulation
    Vanguard US Equity Index Accumulation
    Why those three? Its a strange mix.

    I think the first two are more predictable (maybe safest?) but the last one is performing best atm.
    Safe is not a word you would use when describing a medium/high to high risk fund.

    US equity has been doing well as US equity has done well in this cycle overall. Partly because US equity underperformed in the previous cycle and there has been a financial stimulus in the US (which puts it at higher risk in the next cycle as Trump has shot his load early rather than keep it in the bag for the next downturn).

    Holding a single sector fund in isolation is extremely high risk and bad quality investing. It may be that you are doing a core and satellite approach to investing but the inclusion of the rather poor quality Target Retirement fund and a VLS fund suggests that is not the case and the that the selection lacks any structure. More a case of "I will have that one and that one, and that one".

    Secondly I have about 15k in frozen works pensions that I have transferred over to Pensionbee just for convenience.
    If they were frozen then pensionbee would not have accepted them.

    Can I SIPP that to gain extra tax relief?
    They are already in a pension. A SIPP is a pension. So, you wouldn't be making a personal contribution again with that money.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Roland Flagg
    • By Roland Flagg 19th May 19, 10:53 AM
    • 1,230 Posts
    • 429 Thanks
    Roland Flagg
    • #4
    • 19th May 19, 10:53 AM
    • #4
    • 19th May 19, 10:53 AM
    Thanks both of you for your input.

    DunstonH:

    As you can tell I'm a novice investor.
    The reason I choose those three funds is that they seem very popular, and with them being passive funds I don't have to invest much time in them, and the charges I thought were reasonable at around 0.22%

    If you were in my shoes with 240 (300) to invest each month into my HL SIPP which better options would you suggest, taking into account a time frame of 15 to 17 years at the earliest I would want to release some cash, and I want funds I don't have mess around with too much, and have low charges?
    Thanks.
    • Albermarle
    • By Albermarle 19th May 19, 11:07 AM
    • 1,582 Posts
    • 1,023 Thanks
    Albermarle
    • #5
    • 19th May 19, 11:07 AM
    • #5
    • 19th May 19, 11:07 AM
    Probably more logical just to invest it all in VLS 80 ( or similar ) or if you want to dial down.
    the risk then VLS 60 ( or similar) .
    Or have VLS 80 and a similar medium/high risk multi asset fund from another provider , like Blackrock .
    The logic behind this is that although on the surface they are similar they are managed differently , with different regional splits etc .
    • AnotherJoe
    • By AnotherJoe 19th May 19, 11:07 AM
    • 16,018 Posts
    • 19,213 Thanks
    AnotherJoe
    • #6
    • 19th May 19, 11:07 AM
    • #6
    • 19th May 19, 11:07 AM
    The "issue"with those three funds is the extremely high overlap between their underlying constituents.
    I would not have the US one. I'd switch either into the two existing or something a bit different, for example, emerging markets, renewable energy, small companies, if you want to stick to vanguard I suspect they have funds that cover all those.
    As you have maxed your SIPP out then as per dunstonh either LISA which is inaccessible until age 60 but has a useful 25% bump, or an ISA.
    • seacaitch
    • By seacaitch 19th May 19, 11:45 AM
    • 246 Posts
    • 436 Thanks
    seacaitch
    • #7
    • 19th May 19, 11:45 AM
    • #7
    • 19th May 19, 11:45 AM
    Do you have any earned income over 3,600? If so you can pay 80% of that figure (in total) into your SIPP and gain tax relief.
    Originally posted by OldBeanz

    The OP, Roland Flagg, hasn't answered this question.

    15-17 years off retirement, so presumably there's "income" of some sort coming from somewhere in the meantime...

    Per OldBeanz, is any of this "income" actually earned income above 3600?
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