Discussion
I already have invested in funds ISAs over the years should i invest in a SIPP ? it seems to like an ISA - but with the govt throwing in 20% -or should i use up my annual allowance still on more fund Isas
I am aware that a SIPP lacks flexibility and has restrictions-i'm okay with that
However , i already have a public sector pension and the impression i got was that i don't need a SIPP -although i can't see why this is relevant really if you can grab another 20% ? Also i have heard it is better for higher rate taxpayers- but to me again -that's still 20%
Also is there a 1k minimum investment per fund as in fund isas?
Or have i got it wrong?
I am aware that a SIPP lacks flexibility and has restrictions-i'm okay with that
However , i already have a public sector pension and the impression i got was that i don't need a SIPP -although i can't see why this is relevant really if you can grab another 20% ? Also i have heard it is better for higher rate taxpayers- but to me again -that's still 20%
Also is there a 1k minimum investment per fund as in fund isas?
Or have i got it wrong?
A SIPP is a pension wrapper (Self Invested Personal Pension). The carrot is tax relief on your contributions. The stick is significant restrictions on accessing your money; in particular nothing at all before 55 and lots of rules after then.
An ISA is a tax break for savings. No tax releif, but no restrictions on getting your cash if you need to.
I am not a regulated adviser and this is not advice, but I would always fill my ISA allowance first before even considering extra pension contributions.
An ISA is a tax break for savings. No tax releif, but no restrictions on getting your cash if you need to.
I am not a regulated adviser and this is not advice, but I would always fill my ISA allowance first before even considering extra pension contributions.
Mostly depends at what rate you pay income tax. As a basic rate tax payer there is little difference between an ISA or pension, the pension you get tax relief on paying in, but tax on the income. The ISA pays tax on the way in, but no tax on income drawn from it.
As a higher rate tax payer the pension is better option, 40% relief on payments in, and unless your investments do really well, most only pay tax from a pension at 20%
Pension has the advantage of being able to draw down 25% tax free at retirement, but the downside is your money can't be touched for many years, unlike an ISA
As you're asking about a SIPP I'm assuming there are no employer contributions to consider, which would make a pension a better bet
As a higher rate tax payer the pension is better option, 40% relief on payments in, and unless your investments do really well, most only pay tax from a pension at 20%
Pension has the advantage of being able to draw down 25% tax free at retirement, but the downside is your money can't be touched for many years, unlike an ISA
As you're asking about a SIPP I'm assuming there are no employer contributions to consider, which would make a pension a better bet
uknick said:
As you are in a public sector pension, why not pay additional amounts into that?
Well according to my colleagues if i put in AVCs -i sort of lose the LGPS status as AVCs are dealt with by Prudential -in other words a private external institution .Is this true or nonsense?tali1 said:
Well according to my colleagues if i put in AVCs -i sort of lose the LGPS status as AVCs are dealt with by Prudential -in other words a private external institution .Is this true or nonsense?
Possibly true - I know that they deal with AVCs differently now, in a less benign light to reflect prevailing conditions 
Jockman said:
tali1 said:
Well according to my colleagues if i put in AVCs -i sort of lose the LGPS status as AVCs are dealt with by Prudential -in other words a private external institution .Is this true or nonsense?
Possibly true - I know that they deal with AVCs differently now, in a less benign light to reflect prevailing conditions tali1 said:
Well according to my colleagues if i put in AVCs -i sort of lose the LGPS status as AVCs are dealt with by Prudential -in other words a private external institution .Is this true or nonsense?
There are a number of ways to add to your pension. These include the AVCs you mention but also buying added years.Have a look at the website
http://www.civilservice.gov.uk/pensions
Incorrect website is mentioned above: that site is for members of the Principal Civil Service Pension Scheme. The OP says he is a member of the Local Government Pension Scheme and the relevant webite is here:
www.lgps.org.uk/
R.
www.lgps.org.uk/
R.
The Leaper said:
Incorrect website is mentioned above: that site is for members of the Principal Civil Service Pension Scheme. The OP says he is a member of the Local Government Pension Scheme and the relevant webite is here:
www.lgps.org.uk/
R.
My mistake.www.lgps.org.uk/
R.
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