SIPP - This this possible?
Posted: March 21st, 2024, 9:38 am
I'm now 55 and retired after doing well with Matched Betting years ago, then tech investments.
I have access to my H+L SIPP which I've been paying £240 a month in (topped up to £300 with tax relief) for about 20 years.
I've just been putting the money into a combo of a total market index fund, and a little bit of QQQ.
The pot is not as big as my other tax efficient savings that I have in Cash and S&S ISAs.
At the moment the SIPP is at around the £70k mark.
I don't have any income except for about £3k a year via non-tax efficient investments and small side hustles .
I can dip into my ISAs if needed, but my outgoings are tiny.
Am I right in thinking that I won't have to pay tax on the SIPP if I start taking lump sums out of it because I will be well within my personal allowance?
Say If I took £7k a year out (either one amount per year, or monthly amounts doesn't matter to me).
So basically the plan is:
To wind down my SIPP before I get my state pension at 67 because that is classed as taxable income.
Then at 67 live off my state pension and my ISA savings.
Also, and this maybe a bit cheeky, but if I can prove that the money taken out isn't going into another pension (which it isn't) and it's just going into an savings account to pay bills can I still pay in the £2,880 a year and still get the £360 tax relief until I'm 75, as I the £7k amount I'm taking out is well within my personal allowance and within the £7.5k tax recycling amount (I may be getting confused if the latter matters) and the amount I'm paying back in is under the £4k MPAA?
Obviously I want to stay within the law and not have HMRC after me!
Cheers.
I have access to my H+L SIPP which I've been paying £240 a month in (topped up to £300 with tax relief) for about 20 years.
I've just been putting the money into a combo of a total market index fund, and a little bit of QQQ.
The pot is not as big as my other tax efficient savings that I have in Cash and S&S ISAs.
At the moment the SIPP is at around the £70k mark.
I don't have any income except for about £3k a year via non-tax efficient investments and small side hustles .
I can dip into my ISAs if needed, but my outgoings are tiny.
Am I right in thinking that I won't have to pay tax on the SIPP if I start taking lump sums out of it because I will be well within my personal allowance?
Say If I took £7k a year out (either one amount per year, or monthly amounts doesn't matter to me).
So basically the plan is:
To wind down my SIPP before I get my state pension at 67 because that is classed as taxable income.
Then at 67 live off my state pension and my ISA savings.
Also, and this maybe a bit cheeky, but if I can prove that the money taken out isn't going into another pension (which it isn't) and it's just going into an savings account to pay bills can I still pay in the £2,880 a year and still get the £360 tax relief until I'm 75, as I the £7k amount I'm taking out is well within my personal allowance and within the £7.5k tax recycling amount (I may be getting confused if the latter matters) and the amount I'm paying back in is under the £4k MPAA?
Obviously I want to stay within the law and not have HMRC after me!
Cheers.