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I really didn't think I would be in this situation as I was previously under the impression that my pension was simple and straightforward. However it is not quite as straightforward as I thought as I have no experience of a SIPP. I would therefore be grateful for any advice from those who do have experience.

My pension will start in February when I turn 60. This is mainly a teachers' pension ( Yay - hooray for me!) but I also contributed to an AVC with Prudential which would normally be accessed at the same time. I had envisaged to simply take 25% of this tax free and to buy an anuity with the remainder. However it looks as if "drawdown" by transferring to a SIPP would be the way to go. I understand this would operate in the same way as my ISA with Interactive Investor and they say it will cost me no more than another £10 per month on top of the £10 per month I pay at the moment for the ISA. I would be OK with this.

My questions are :

Can I continue to contribute to the SIPP? I understand there are tax advantages to doing this - ie that the government will effectively add to the amount I pay in. How does this work?

Can I pay in and take money from the SIPP at the same time?

 

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On 22/12/2020 at 14:00, man o' the year said:

I really didn't think I would be in this situation as I was previously under the impression that my pension was simple and straightforward. However it is not quite as straightforward as I thought as I have no experience of a SIPP. I would therefore be grateful for any advice from those who do have experience.

My pension will start in February when I turn 60. This is mainly a teachers' pension ( Yay - hooray for me!) but I also contributed to an AVC with Prudential which would normally be accessed at the same time. I had envisaged to simply take 25% of this tax free and to buy an anuity with the remainder. However it looks as if "drawdown" by transferring to a SIPP would be the way to go. I understand this would operate in the same way as my ISA with Interactive Investor and they say it will cost me no more than another £10 per month on top of the £10 per month I pay at the moment for the ISA. I would be OK with this.

My questions are :

Can I continue to contribute to the SIPP? I understand there are tax advantages to doing this - ie that the government will effectively add to the amount I pay in. How does this work?

Can I pay in and take money from the SIPP at the same time?

 

Maybe have a read about Money Purchase Annual Allowance

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On 22/12/2020 at 14:00, man o' the year said:

Can I continue to contribute to the SIPP? I understand there are tax advantages to doing this - ie that the government will effectively add to the amount I pay in. How does this work?

Can I pay in and take money from the SIPP at the same time?

Yes you can continue to contribute;

https://www.youinvest.co.uk/faq/can-i-make-additional-contributions-my-sipp-after-starting-drawdown

Yes you can pay in and take money out, but after the 25% tax free element it's all liable for tax at whatever rate you pay.:) 

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On 27/12/2020 at 19:28, NogintheNog said:

Yes you can continue to contribute;

https://www.youinvest.co.uk/faq/can-i-make-additional-contributions-my-sipp-after-starting-drawdown

Yes you can pay in and take money out, but after the 25% tax free element it's all liable for tax at whatever rate you pay.:) 

This is a tricky subject that needs proper advice depending on personal circumstances and goals.  For example, while the above seems true, I was also told you can still make the full cintributions (maybe the carry forwards too) if you only took the tax free 25% and did not drawdown beyond that. But I still won't believe that until I try.  So that could be both a yes and a no depending on the precise personal goals and circumstances.  Then there's the recycling rules.  Advice, not via internet forums, is easy and essential.

Edited by Harley
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