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  • FIRST POST
    • Dh6
    • By Dh6 14th Jan 20, 8:34 PM
    • 17Posts
    • 2Thanks
    Dh6
    Making progress
    • #1
    • 14th Jan 20, 8:34 PM
    Making progress 14th Jan 20 at 8:34 PM
    Hi All.

    Since joining the forums I've read a lot of threads past and present and gained some valuable insight and knowledge. I've purchased the John Edwards DIY pensions book and along with browsing this forum I feel a lot better informed to make some decisions on my future.

    I've started the process of changing my trading status from self employed to a Limited company as I will be better off financially anyway so pension benefits of paying in via my Ltd company is an added bonus.

    My current plan is as follows ;

    I'm paying 4K a year into my Lisa ( 5k with government bonus )

    I'll be investing 600 per month into a passive global index tracker ( SIPP )

    Any extra money I earn over and above what covers, all my bills plus holidays etc I'm willing to invest into the SIPP.

    In the mean time I'm working on building up a cash buffer of around 50% of my annual income.

    I'm 33 currently with no pension provisions whatsoever.

    If you were in my situation what would be your thoughts on my above plan?

    I'm keen to find the best platform for paying in monthly or if I'd be better off paying in a lump sum at the end of every tax year?

    Many thanks.
Page 1
    • Dazed and confused
    • By Dazed and confused 14th Jan 20, 8:47 PM
    • 6,193 Posts
    • 3,308 Thanks
    Dazed and confused
    • #2
    • 14th Jan 20, 8:47 PM
    • #2
    • 14th Jan 20, 8:47 PM
    Not sure I follow your plan.

    If you are changing to limited company and intend on contributing via the company why are you paying 600/month into a SIPP yourself?

    There may be a valid reason but it's not clear.
    • Dh6
    • By Dh6 14th Jan 20, 8:58 PM
    • 17 Posts
    • 2 Thanks
    Dh6
    • #3
    • 14th Jan 20, 8:58 PM
    • #3
    • 14th Jan 20, 8:58 PM
    The 600 per month is the contribution from my Ltd company.

    My apologies, I've re read my post and I didn't make that clear.
    • Dazed and confused
    • By Dazed and confused 14th Jan 20, 9:02 PM
    • 6,193 Posts
    • 3,308 Thanks
    Dazed and confused
    • #4
    • 14th Jan 20, 9:02 PM
    • #4
    • 14th Jan 20, 9:02 PM
    An important thing for you to remember going forward is that you are a separate entity to the company.

    You may have control over the company but you and the company are separate.
    • Dh6
    • By Dh6 14th Jan 20, 9:10 PM
    • 17 Posts
    • 2 Thanks
    Dh6
    • #5
    • 14th Jan 20, 9:10 PM
    • #5
    • 14th Jan 20, 9:10 PM
    I understand that.

    Am I misunderstanding how my company can pay into my pension as I'm an employee of my own Ltd company?

    Can I do the above within a SIPP?
    • xylophone
    • By xylophone 14th Jan 20, 10:57 PM
    • 32,048 Posts
    • 19,920 Thanks
    xylophone
    • #6
    • 14th Jan 20, 10:57 PM
    • #6
    • 14th Jan 20, 10:57 PM
    https://www.pensionbee.com/pensions-explained/pension-contributions/contributing-to-your-pension-from-your-limited-company

    https://www.hl.co.uk/pensions/contributions/employer

    for information.
    • Dh6
    • By Dh6 14th Jan 20, 11:19 PM
    • 17 Posts
    • 2 Thanks
    Dh6
    • #7
    • 14th Jan 20, 11:19 PM
    • #7
    • 14th Jan 20, 11:19 PM
    Thanks Xylophone, I intend to make contributions through my limited company as a director into my SIPP.

    Would it be advantageous to pay monthly or an annual lump sum?

    Currently I think that the vanguard platform is one of the better options for me.
    • Albermarle
    • By Albermarle 15th Jan 20, 10:07 AM
    • 2,214 Posts
    • 1,454 Thanks
    Albermarle
    • #8
    • 15th Jan 20, 10:07 AM
    • #8
    • 15th Jan 20, 10:07 AM
    Would it be advantageous to pay monthly or an annual lump sum?
    Not a huge amount of difference one way or the other . Depends on market movements which are unpredictable .
    Currently I think that the vanguard platform is one of the better options for me
    .
    Vanguard doe not offer a SIPP just yet , will be about 3 months in theory. Plenty of other platforms available:
    https://monevator.com/compare-uk-cheapest-online-brokers/
    • Notepad Phil
    • By Notepad Phil 15th Jan 20, 4:50 PM
    • 96 Posts
    • 73 Thanks
    Notepad Phil
    • #9
    • 15th Jan 20, 4:50 PM
    • #9
    • 15th Jan 20, 4:50 PM
    Would it be advantageous to pay monthly or an annual lump sum?
    Originally posted by Dh6
    There's a common saying when it comes to investing: 'time in the market, not timing the market'. Now I know you aren't trying to time your contributions, but the sooner you can get your money in the better it usually is. So if you can contribute monthly, and that has the same initial costs to you as contributing yearly, then that in my opinion is the best way to do it.
    • atush
    • By atush 15th Jan 20, 7:18 PM
    • 18,105 Posts
    • 11,516 Thanks
    atush
    Lump sum or monthly depends on cash flow.

    Do you have cash and investments outside of your Sipp? I know you have a lisa (but nto the amt) and i know you will build up a cash sum (but havent finished). It is easier to build u cash while your income is higher. Will you be taking only a min salary and taking dividends instead?
    • BoGoF
    • By BoGoF 15th Jan 20, 7:30 PM
    • 5,912 Posts
    • 5,989 Thanks
    BoGoF
    You will have to make sure they know it's a company contribution and not personal or you will be getting tax relief you are not entitled to.
    • Prism
    • By Prism 15th Jan 20, 8:32 PM
    • 1,280 Posts
    • 948 Thanks
    Prism
    I contribute monthly from my limited company into my SIPP, and then towards the end of the financial year I make a decision if to add an extra lump sum or not
    • Dh6
    • By Dh6 17th Jan 20, 7:53 PM
    • 17 Posts
    • 2 Thanks
    Dh6
    I have just paid off the remaining debt I had on my house ( borrowed from family member interest free )

    I've no savings outside of my LISA currently.

    Since I no longer have payments going out to family member I've got spare cash to invest every month hence my plan to invest monthly and then possibly add a lump sum if I have it at the end of the tax year.

    I've looked endlessly through the comparison tables of the SIPP providers but find myself still a little confused on which platform provider would work out cheapest for me for investing around 600pm.

    Could anyone help me with the cheapest provider for my particular circumstances?

    Many thanks DH
    • Dazed and confused
    • By Dazed and confused 17th Jan 20, 8:28 PM
    • 6,193 Posts
    • 3,308 Thanks
    Dazed and confused
    I thought your employer was making the contributions?

    That could result in a different set of providers to consider.
    • Dh6
    • By Dh6 17th Jan 20, 8:34 PM
    • 17 Posts
    • 2 Thanks
    Dh6
    I have now made the choice to remain self employed, the potential tax savings each year were around 500 at my current income so I will be investing personally as the tax savings don't seem worth the extra 'hassle'
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