Lost tax benefit on LISA?

Alexland wrote: »

It's tricky as you will need to balance your current needs against the opportunity to be tax efficient. At the very least it's worth making high enough pension contributions to get the maximum employer matching.

Alex

I envy those who has employer matching their pension contributions. My employer told me they don't do this when I asked them 5 months ago.

Wildsound wrote: »

If you're saving for your first home, I would argue the LISA is still better than gaining a higher tax relief in the pension:

1) You'll be able to have more money for your deposit = less mortgage to payback, therefore less interest over the term to pay, so this will make up partially for this "loss" in tax relief you would have got now.
2) You have no idea what government position on pensions will be when you retire (given you're under 40). Whilst it might look favourable for the pension now, who knows what the tax rates/policies will be on your pension when you come to retire.

Honestly, the LISA's £450k limit on first home puts me off. I live in London, house under the limit is either far away from central London or in an area that isn't nice to live (e.g.: near a persistence loud noise source). Therefore, I'm currently only considering use LISA for retirement, not for the first home.
For the 2nd, point taken. It's a risk that the pension rules may change before I retire. But based on the recent changes related to pension and retirement, chances are only the lifetime allowance and pension age will change, the pension freedom and tax rules are unlikely to change dramatically. Regardless, I believe that at the end, people who contributed to their pension more will still live better than who contributed less.

Alexland wrote: »

Yup and with a DC scheme the individual needs to accumulate a big pot to get a meaningful income. 30 years retirement is 360 missing paydays. Are you sure your employer isn't making a matched contribution into your pension? If you put something in they should too.

Alex

My employer only makes the minimal 2% contribution (to be increased to 3% in Apr 2019).

Plus, the workplace pension schema doesn't give me a wide choice of investment, so I will make my additional contribution above the 3% minimal to my SIPP instead of the workplace pension.

Alexland wrote: »

Yeah that's a pretty poor employer matching. If they operate salary sacrifice to save the national insurance your workplace pension might still beat a SIPP. With a SIPP you will need to complete self assessment to get the higher rate tax relief. My workplace scheme allows partial transfers out so I can contribute efficiently then move lump sums into my SIPP.

Alex

Are you sure that I'd have to fill in self assessment to get the full tax relief on SIPP contribution? Because I asked exactly that in this post: https://forums.moneysavingexpert.com/showthread.php?t=5881108 , and I've been told that I don't need to fill in the self assessment.

I'm confused.

Alexland wrote: »

Sorry yes there is the method of asking HMRC to alter your tax code but I haven't tried this myself so cannot comment on if this is easier or harder than doing self assessment.

Thanks again. I'll start preparing for SA. I feel that SA is something I will have to do eventually. I'd rather start doing it when it's relatively simple.