Company pension and stakeholder pension.
Discussion
Morning folks and a Happy New Year to you all.
I currently pay into a workplace pension scheme. It is a DC scheme with a generous amount added each month by my employer. I am not allowed to make any additional voluntary contributions to this pension so I am considering taking out a small private stakeholder pension in addition to my workplace pension to top it up. I'm 42 and aiming to retire around 60.
Does the Government allow individuals to contribute to two separate pension schemes and I would I receive tax relief on the stakeholder pension? I am a higher rate taxpayer. The total contributions to both pensions by my employer and I would be well under the £40k / annum limit.
Finally what sort of growth could I realistically expect after management fees on the stakeholder pension? I would be hoping for around 4% per annum but not sure if this is achievable.
Thanks in advance for your advice.
I currently pay into a workplace pension scheme. It is a DC scheme with a generous amount added each month by my employer. I am not allowed to make any additional voluntary contributions to this pension so I am considering taking out a small private stakeholder pension in addition to my workplace pension to top it up. I'm 42 and aiming to retire around 60.
Does the Government allow individuals to contribute to two separate pension schemes and I would I receive tax relief on the stakeholder pension? I am a higher rate taxpayer. The total contributions to both pensions by my employer and I would be well under the £40k / annum limit.
Finally what sort of growth could I realistically expect after management fees on the stakeholder pension? I would be hoping for around 4% per annum but not sure if this is achievable.
Thanks in advance for your advice.
Hi, I stand very open to correction but I don't think you mean a Stakeholder pension; those are DC schemes offered by employers, so what I think you mean is a SIPP (self-invested personal pension)? Your contribution would come from your bank account basically via a direct debit.
Yes, the government allows you to be in a company pension and a SIPP and will give you tax relief on it (I say this from experience). You'd get 20% added to your contribution via the provider claiming it from HMRC, if you are at 40% you need to phone up HMRC, inform them of your contributions and they will amend your tax code accordingly. I presume you could also inform them via self-assessment but I found it easier to just call them.
Management fees are always a hot topic and higher fees will erode returns. Return is ultimately going to depend on the fund performance. If I had put everything in my SIPP into my best performing fund I'd have a 130% return, if I had put everything into the worse performing fund I'd be down 30%!
For better explanations/detail start here; http://www.hl.co.uk/pensions/sipp there are cheaper providers out there, but I find their website decent to use.
Yes, the government allows you to be in a company pension and a SIPP and will give you tax relief on it (I say this from experience). You'd get 20% added to your contribution via the provider claiming it from HMRC, if you are at 40% you need to phone up HMRC, inform them of your contributions and they will amend your tax code accordingly. I presume you could also inform them via self-assessment but I found it easier to just call them.
Management fees are always a hot topic and higher fees will erode returns. Return is ultimately going to depend on the fund performance. If I had put everything in my SIPP into my best performing fund I'd have a 130% return, if I had put everything into the worse performing fund I'd be down 30%!
For better explanations/detail start here; http://www.hl.co.uk/pensions/sipp there are cheaper providers out there, but I find their website decent to use.
DavidJJ said:
Hi, I stand very open to correction but I don't think you mean a Stakeholder pension; those are DC schemes offered by employers, so what I think you mean is a SIPP (self-invested personal pension)? Your contribution would come from your bank account basically via a direct debit.
Yes, the government allows you to be in a company pension and a SIPP and will give you tax relief on it (I say this from experience). You'd get 20% added to your contribution via the provider claiming it from HMRC, if you are at 40% you need to phone up HMRC, inform them of your contributions and they will amend your tax code accordingly. I presume you could also inform them via self-assessment but I found it easier to just call them.
Management fees are always a hot topic and higher fees will erode returns. Return is ultimately going to depend on the fund performance. If I had put everything in my SIPP into my best performing fund I'd have a 130% return, if I had put everything into the worse performing fund I'd be down 30%!
For better explanations/detail start here; http://www.hl.co.uk/pensions/sipp there are cheaper providers out there, but I find their website decent to use.
The OP does mean stakeholder not SIPP. It is basically just a basic personal pension with a restriction on investment choices and lower fees.Yes, the government allows you to be in a company pension and a SIPP and will give you tax relief on it (I say this from experience). You'd get 20% added to your contribution via the provider claiming it from HMRC, if you are at 40% you need to phone up HMRC, inform them of your contributions and they will amend your tax code accordingly. I presume you could also inform them via self-assessment but I found it easier to just call them.
Management fees are always a hot topic and higher fees will erode returns. Return is ultimately going to depend on the fund performance. If I had put everything in my SIPP into my best performing fund I'd have a 130% return, if I had put everything into the worse performing fund I'd be down 30%!
For better explanations/detail start here; http://www.hl.co.uk/pensions/sipp there are cheaper providers out there, but I find their website decent to use.
Ecosseven said:
Morning folks and a Happy New Year to you all.
I currently pay into a workplace pension scheme. It is a DC scheme with a generous amount added each month by my employer. I am not allowed to make any additional voluntary contributions to this pension so I am considering taking out a small private stakeholder pension in addition to my workplace pension to top it up. I'm 42 and aiming to retire around 60.
Does the Government allow individuals to contribute to two separate pension schemes and I would I receive tax relief on the stakeholder pension? I am a higher rate taxpayer. The total contributions to both pensions by my employer and I would be well under the £40k / annum limit.
Finally what sort of growth could I realistically expect after management fees on the stakeholder pension? I would be hoping for around 4% per annum but not sure if this is achievable.
Thanks in advance for your advice.
You seem pretty well informed already - a post fee return of 4% or more should be comfortably achievable over the long-term, proving you are happy to take some investment risk.I currently pay into a workplace pension scheme. It is a DC scheme with a generous amount added each month by my employer. I am not allowed to make any additional voluntary contributions to this pension so I am considering taking out a small private stakeholder pension in addition to my workplace pension to top it up. I'm 42 and aiming to retire around 60.
Does the Government allow individuals to contribute to two separate pension schemes and I would I receive tax relief on the stakeholder pension? I am a higher rate taxpayer. The total contributions to both pensions by my employer and I would be well under the £40k / annum limit.
Finally what sort of growth could I realistically expect after management fees on the stakeholder pension? I would be hoping for around 4% per annum but not sure if this is achievable.
Thanks in advance for your advice.
I’ll leave the resident forum experts on personal pensions to provide a more detailed response.
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