magazine archive
magazine archive
Ask Rachel
As a higher-rate tax payer can I use a SIPP to reduce my tax bill?
Thursday 25 Jul 2024I am earning above the £50,000 tax threshold and want to pay money into a SIPP to avoid paying 40% tax. I also have existing shares and want to avoid paying dividend tax so am also keen to put these into a SIPP. Can I transfer existing shares into a SIPP using ‘Bed & SIPP’ and also claim tax...
What happens to my pension if I die before 75 and what are the tax implications?
Thursday 18 Jul 2024I am 72 and retired. I am aware that if I die after my 75th birthday my Pension Pot would be taxed as income by my beneficiaries (wife and children). As this would no doubt incur some 40% liability, would it make sense to draw from the SIPP up to my 20% income tax limit in the next 3 years rather...
How am I taxed on withdrawals from my pension?
Thursday 11 Jul 2024I retired officially a couple of years ago. At the time I had a big increase in my income, so I increased the amount put into long-term investments, and I spend the dividends generated by them. I also have several savings accounts. I started a SIPP recently. My current intention is not to touch it...
What is a transitional tax-free amount certificate and why would you need one?
Thursday 04 Jul 2024I retired in 2019 at the age of 65. I recently (i.e. this tax year) tried to withdraw cash from a private pension, but the provider told me that I might (or might not) need a transitional tax-free amount certificate (TTFAC). But they failed to explain what a TTFAC was or how it might apply in my...
What is pound cost ravaging and how can I guard against it?
Thursday 27 Jun 2024I am planning on finishing work in a few months’ time and want to take my tax-free cash from my pension pot. I understand the rest of my pot will remain invested. However, I have been reading up on this and how to manage the investment. A couple of sources have mentioned ‘pound cost ravaging’. What...
Should I transfer my workplace pension scheme to a SIPP?
Thursday 20 Jun 2024I am currently considering my retirement options and have a question regarding transferring my pension from a workplace scheme to a SIPP (self-invested personal pension). I’m wondering if it’s possible to make such a transfer and what considerations or steps might be involved in the process. Diego...
I want to leave funds in my SIPP to my granddaughter, how do I go about it?
Thursday 13 Jun 2024I’m currently 70 years old and intend to leave whatever is left in my SIPP to my granddaughter who is 17 years old. What are the current regulations regarding at what age she would be allowed to access the money, and is there any method to ensure it stays invested until she is of pensionable age?...
If I already have a salary sacrifice pension should I move to a SIPP?
Thursday 30 May 2024If you already have a salary sacrifice pension from your employer, is there anything to gain by moving to a SIPP? Anonymous Rachel Vahey, AJ Bell Head of Public Policy, says: Before answering it’s probably worth quickly explaining what salary sacrifice is and how it works in relation to a pension...
Do I have to take my state pension when I reach 66?
Thursday 23 May 2024My 66th birthday is in August. I am currently still working, although on a part-time basis, but my income from that is sufficient to meet my needs for the meantime. However, I am due to get the state pension in a few months’ time, but don’t really need the money. Do I have to take it? Could I delay...
How much could I withdraw from my pension in a year without incurring tax?
Thursday 16 May 2024If a person retires before state pension age, and their only taxable income is from a SIPP, how much can they withdraw a year tax free by taking a lump sum and some income before any income tax is due? What are the advantages or disadvantages of taking a tax-free lump sum like this as opposed to...