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    • vivvov
    • By vivvov 13th Mar 17, 10:06 PM
    • 88Posts
    • 21Thanks
    SIPP novice (yet another..thanks for any replies folks)
    • #1
    • 13th Mar 17, 10:06 PM
    SIPP novice (yet another..thanks for any replies folks) 13th Mar 17 at 10:06 PM
    Hello All

    I'll try to be as brief as possible:
    I was looking at other posts and getting confused so thought I'll create a new post (and repeat what many others have similarly asked).

    I've a few pensions from 3 different workplaces:
    A FriendsLife New Generation Company Personal Pension Plan: Approx Fund value 37k. Transfer Value 41.5k. (Left the company in 2008).
    A FriendsLife Personal Pension Plan: Approx Fund Value 20.5k. Transfer Value 21k. (I think this is a Opted out/SERPS thingo..Left same company 2008).
    A few year period of no pension/agency work then a MA.
    Then a brief 7 month sojourn at a County Council/Local Government Pension Scheme (7 months)..not sure about that it it lost?
    Aegon/Scottish Equitable: Company PPP: 5.5k (one year contract).

    I am currently unemployed, since August 2016, so all pensions are just ticking over in their individual pots.
    Received a letter from Aegon in November '16 stating I had 3 options..1)leave the plan paid up and convert to Individual PP.(might increase annual Management charge) 2) Same but continue paying in regularly.
    3) Transfer.

    I've had to step back from employment in order to care for my Dad and then, after he passed at Christmas, my Uncle who has end stage cancer. Sad times but it's given me time to actually start to take an overview what to actually do with my finances, amongst other things the pension pots (as opposed to sticking them in a drawer and ignoring them, has as been my way). Also aiming to enact changes. Time to act..first time I've not been thinking have I got enough for old age.
    ..Just about to put my flat on the free. No children and my Partner is also ditto mortgage very lucky and aiming to sell both, move from London and buy a joint property at a third of the price and invest the substantial remainder.
    Plus I (and partner) have fairly substantial savings, fairly well off resource wise..(that I've finally been brave enough to attempt to move from cash ISAS and NS&I accounts into stocks and share ISAs..Fundsmith mainly at this moment but looking towards diversifying into cheap US tracker and Emerging Markets funds to start with)
    Plus I'll be inheriting (as long as life doesn't banana skin me first) quite an amount (just below IHT threshold) the extent that bizarrely, at my early 50s, I feel financially ok and this will only get augmented.
    I can take the time to not work full-time and help my Mum and my Uncle get through the difficult emotional times that we're all presently working our way through.

    So that's my position and I looked at the pensions I've got...
    But looking at their performance and comparing it with the returns (and management costs) over the last 6 or so years..I guess they've performed ok but...

    ..and here's the questions finally..
    Main one: Would I be best consolidating the pension pots into a SIPP?

    Also still have money to invest so thought I'd try and put as much as possible into the SIPP pre end of this tax year and then when I go back to work, stick as much as is allowed from my wages into the SIPP every tax year I work (and 2880 if I don't) the SIPP will be continually added to (as well as the ISA).

    ..I also read somewhere that I could allocate funds from 3 years back into a I right in thinking that?
    All in all that might mean a combined approx 70k initially into a SIPP and then more as the time goes on.

    Then if a SIPP is the right way forward, I've been looking at platforms. Is Interactive Investor the cheapest admin cost wise and a good platform overall for my needs?

    Aiming to invest initially in e.g. Vanguard S&P 500 tracker (cheap management cost, good enough for Buffet to suggest as an invest and leave>>especially with even a novice like me hearing fiscal stimulus/infrastructure spend meaning get in now)..then start to look at safe steady Emerging Markets Fund in order to start diversifying further as time goes on.

    Or have I completely missed the mark in all of this???
    Thanks in advance for replies.
Page 1
    • zagfles
    • By zagfles 13th Mar 17, 10:26 PM
    • 13,016 Posts
    • 11,056 Thanks
    • #2
    • 13th Mar 17, 10:26 PM
    • #2
    • 13th Mar 17, 10:26 PM
    Unless you earnt 70k this tax year you won't be able to put that amount into a SIPP. Or you could but you wouldn't get tax relief, which would nearly always mean it'd be a daft idea, as you'd be liable for tax on the way out. The tax relief limit is 100% of your relevant earnings (or 3600 if greater) and there is no carry forwards.

    You're probably thinking of the annual allowance, which is a completely separate limit, 40k a year, and that can be carried fowards from the last 3 tax years.

    This confuses a lot of people as there's so much simplistic drivel written which tries to treat the two limits as one eg "100% of earnings subject to 3600 min, 40k max", when they are in fact two completely separate limits with completely different rules.
    • AnotherJoe
    • By AnotherJoe 13th Mar 17, 10:49 PM
    • 9,413 Posts
    • 10,404 Thanks
    • #3
    • 13th Mar 17, 10:49 PM
    • #3
    • 13th Mar 17, 10:49 PM

    Aiming to invest initially in e.g. Vanguard S&P 500 tracker (cheap management cost, good enough for Buffet to suggest as an invest and leave.
    Originally posted by vivvov
    Good enough for 80 year old Americans with a different currency and tax regime . What you've done there is the equivalent of a UK guru suggesting a Brit buys an FTSE 100 income tracker fund in a ISA for an 80 year old and and an American then buying the S&P500 in a 401. eg something quite different.

    then start to look at safe steady Emerging Markets Fund in order to start diversifying further as time goes on.
    Originally posted by vivvov
    Is that being sarcastic?

    Or have I completely missed the mark in all of this???
    Originally posted by vivvov
    Some of it (especially thinking because Buffet recommended a S&P tracker to his 80 year old wife thats a global recommendation to everyone) but its a complex area when you get into the details.

    Impossible to comment on transferring your other pensions without knowing what benefits are attached

    As said you can carry forward but only if you earned enough, eg if last year you paid in zero and this year you earned 80k, you can pay in 80k (gross) But if you earned 40k you can only pay in 40k and if you earned diddly squat, you can pay in 2880 to gross up to 3600.
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