Discussion
What are the risks involved in investing in a SIPP? It just seems a bit odd to me that there is any ambiguity over terms of access to the money.
What are the chances that I won't be able to access all the cash at 57 for any reason? Is there any systemic risk?
What are the chances that I won't be able to access all the cash at 57 for any reason? Is there any systemic risk?
Edited by anonymous-user on Tuesday 9th July 14:10
I think once you get within 10 years of the current SIPP age, which is 55 - so 5 years time for you, then you should be safe (ish!) so long as there is no announcement.
I think the govt have to give reasonable notice because if they change it from say 55 to 58 with 1 year notice someone who is 54 and planning their retirement at 55 all of a sudden has to find 3 years extra income in 12 months.
So at 40, there is a risk but I don't think they will go crazy with big changes. Maybe 2-3 years extra at a time. If you were 18 I would say all bets off could be 75 for all we know, or 50!.
The issue is more complex though, as a lot of people with large SIPPs have been buying property with their TFLS which actually in turn brings money back into No11 in SDLT and tax on rental income. Just as one example. I think it will be interesting to see how / if they change things.
I think the govt have to give reasonable notice because if they change it from say 55 to 58 with 1 year notice someone who is 54 and planning their retirement at 55 all of a sudden has to find 3 years extra income in 12 months.
So at 40, there is a risk but I don't think they will go crazy with big changes. Maybe 2-3 years extra at a time. If you were 18 I would say all bets off could be 75 for all we know, or 50!.
The issue is more complex though, as a lot of people with large SIPPs have been buying property with their TFLS which actually in turn brings money back into No11 in SDLT and tax on rental income. Just as one example. I think it will be interesting to see how / if they change things.
Simon - can I just point out that there is no tax on any rental income for property held within a SIPP.
To address the OP, the age at which you can access a SIPP (or personal pension) is set at 10 years before state retirement age. So state retirement age would have to increase for SIPP/pension access age to increase under the current rules.
To address the OP, the age at which you can access a SIPP (or personal pension) is set at 10 years before state retirement age. So state retirement age would have to increase for SIPP/pension access age to increase under the current rules.
JulianPH said:
selmahoose said:
JulianPH said:
Simon - can I just point out that there is no tax on any rental income for property held within a SIPP.
No, and there's no spending it either. 
selmahoose said:
JulianPH said:
selmahoose said:
JulianPH said:
Simon - can I just point out that there is no tax on any rental income for property held within a SIPP.
No, and there's no spending it either. But the same applies with anything (including BTL).
Also, you have paid no CGT or Income Tax on any investment returns made (unlike with BTL), one quarter of your portfolios is available to you tax free and with the balance you are likely to be paying a lower rate of Income Tax when you draw out than you got back when you put the money in.
Given these risks, is a sipp a no brainier vs paying the corporation tax and investing privately? It seems there s lots that can go wrong and I would end up paying Paye anyway.
The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
Sambucket said:
Given these risks, is a sipp a no brainier vs paying the corporation tax and investing privately? It seems there s lots that can go wrong and I would end up paying Paye anyway.
The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
The reality is that there is no one comprehensive answer to these questions that suits everybody's finances and philosophies. The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
Personally, regarding financial matters, I far far far prefer instant gratification to future gratification which latter I just find annoying and frustrating and hugely risky.
But for every person who thinks the same there's another person who thinks the opposite.
There are good reasons why different people have these different attitudes. Neither are right or wrong.
The blessing is that there is a choice.
selmahoose said:
The reality is that there is no one comprehensive answer to these questions that suits everybody's finances and philosophies.
Personally, regarding financial matters, I far far far prefer instant gratification to future gratification which latter I just find annoying and frustrating and hugely risky.
But for every person who thinks the same there's another person who thinks the opposite.
There are good reasons why different people have these different attitudes. Neither are right or wrong.
The blessing is that there is a choice.
I don’t really need the cash until I’m 57 either way. It’s not so much about instant gratification, rather risk management. Personally, regarding financial matters, I far far far prefer instant gratification to future gratification which latter I just find annoying and frustrating and hugely risky.
But for every person who thinks the same there's another person who thinks the opposite.
There are good reasons why different people have these different attitudes. Neither are right or wrong.
The blessing is that there is a choice.
Sambucket said:
I don’t really need the cash until I’m 57 either way. It’s not so much about instant gratification, rather risk management.
Seriously, how do you know what you'll need or not need between now and being 57 (unless you're 56 and three quarters)? A great deal of what is called "risk management" is just plain and simple nonsense which is why so much goes wrong for so many so often.
selmahoose said:
Seriously, how do you know what you'll need or not need between now and being 57 (unless you're 56 and three quarters)?
A great deal of what is called "risk management" is just plain and simple nonsense which is why so much goes wrong for so many so often.
Huh? Why nonsense?A great deal of what is called "risk management" is just plain and simple nonsense which is why so much goes wrong for so many so often.
Now sure I get you. like unexpected medical bills or something?
As otherwise I have enough outside the sipp to last until 57.
Sambucket said:
Given these risks, is a sipp a no brainier vs paying the corporation tax and investing privately? It seems there s lots that can go wrong and I would end up paying Paye anyway.
The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
Hi Sambucket, what risks are you referring to?The standard advice is always always max out your pension first, don’t even think about not maxing out your pension.....
But my gut feeling is that the risk is significant enough to warrant at least a consideration of paying the tax up front?
If you could let me know I can address each of them for you.
selmahoose said:
A great deal of what is called "risk management" is just plain and simple nonsense which is why so much goes wrong for so many so often.
If you're going to make sweeping statements like that it would be a good idea to have some facts, or at least case studies, to back it up.Smoking doesn't cause health problems if you're one of the smokers who doesn't get health problems. However, the statistics paint a different picture. That's what risk management is all about.
Sambucket said:
Huh? Why nonsense?
Now sure I get you. like unexpected medical bills or something?
As otherwise I have enough outside the sipp to last until 57.
Unexpected medical bills are one grain of sand in an endless desert of possibilities. And I DO mean endless. Now sure I get you. like unexpected medical bills or something?
As otherwise I have enough outside the sipp to last until 57.
The nature of things- life itself - is 'to change'. Much change is unforseeable. But what IS and definitely is forseeable is that change will occur. What is also forseeable is that your attitude to this change will also be ever-changing. An ever-changing attitude to ever-changing possibilities.
In the middle of this, up pops a risk-assessor. 'Oh' he says. 'You've never had an accident so you're a great risk to insure'! And then up pops another . 'Oh' he says. 'You've never had an accident, almost everyone has accidents, so your number's overdue to come up so you're a terrible risk to insure'. etc etc etc.
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