Dumb SIPP question

[rfisher]

Can I have a SIPP if I'm in an occupational pension scheme already?

If I can, how do I get some of my salary diverted into the SIPP before it gets tax deducted via my PAYE?

[PurpleMoonlight]

Yes.

Talk to your employer to see if they are willing to put a salary sacrifice arrangement in place.

Warning: the Government are looking to restrict Salary Sacrifice arrangements though.

[rfisher]

Ooooooo, now I just need a friendly financial adviser to see if it's worth bothering setting one up.

[Ozzie Osmond]

No, you don't really. Just open a SIPP with Hargreaves Lansdown (HLs operation is very retail friendly, but there are many alternatives) and buy some mainstream equity funds. For instance, 50% into a UK fund and 50% into a Global fund.

If you phone them up and chat to them you will probably find them very helpful, whether or not you go ahead. They also have a good website to look at.

If you can get tax relief at 40% fill yer pockets while it lasts! (I can't see that it's worth annoying your employer by trying to divert pay - you'll get full tax relief anyway.)

[rfisher]

Tempting indeed, but it's complicated because I'm in a final salary occupational scheme, into which I'm already paying an added years monthly tax free contribution and 55.

Just fancied dabbling with a SIPP, but don't want to feck it up too much at this stage in the game.

[Ozzie Osmond]

rfisher said:

Tempting indeed, but it's complicated because I'm in a final salary occupational scheme, into which I'm already paying an added years monthly tax free contribution and 55.

Just fancied dabbling with a SIPP, but don't want to feck it up too much at this stage in the game.

All of which simply reinforces the previous message, "Talk to HL". In your situation with surplus income I'd be looking to max out tax efficient pension contributions.

Depending on your overall situation you may need to watch out for your overall Lifetime Allowance as well as the annual limit on contributions. You might get the information you need ("information" not "advice") free of charge from HL or alternatively you may need to find yourself an IFA for "advice" after all.

Extra note: Can you pay more money purchase AVCs into your DB scheme (as well as the added years) with a view to pulling them out as "Tax Free Cash" at retirement? This can be very effective. i.e. You might get 40% tax relief on the AVCs and then effectively be able to pull them out as 100% tax free lump sum. Depends on your overall situation and intentions.

Edited by Ozzie Osmond on Monday 15th August 20:17

[rfisher]

Not sure if you can pay both added years and AVCs but I'll ask - sounds like a sensible move if it's allowed.

Thanks for the suggestion.