Pensions Pensions Pensions

Thank you Ron ,remo.
Much appreciated.
Have a great weekend
Ta
G

Paitech wrote: I read this from an article below:

With SIPPs, you get the tax benefits up front. There’s full tax relief on all your contributions, with basic-rate tax (20%) automatically reclaimed and paid into your pension. Higher-rate taxpayers (at either 40% or 45%) can reclaim another 20% or 25% through their tax returns.

What exactly does it mean?

This applies to all pensions you pay into yourself (i.e. not through company polices that take money pre tax). It means the fund will automatically add 20% more than you pay in to the pot, i.e. £100 deposit = £120 in your fund.

If you are a higher rate tax payer you are allowed to claim back the additional tax you have already paid on that money (the extra 20 or 25%) by declaring it on your self assessment.

Effectively all money you pay INTO a pension is untaxed, if you have already been taxed on it before you pay it in then you can claim it back.....it's basically a swizz by the government, if they taxed you on the money that was paid in they couldn't tax you on the money that was taken out. This way you pay it in tax free so they can tax the more substantial amount (generally) that the fund holder draws out. It's similar to what they did with withdrawing betting tax - it seems like the punter is winning but ultimately it means more in their coffers.

money is taken from the gross wage, before tax is taken. Hence why its tax free.

I read this from an article below:

With SIPPs, you get the tax benefits up front. There’s full tax relief on all your contributions, with basic-rate tax (20%) automatically reclaimed and paid into your pension. Higher-rate taxpayers (at either 40% or 45%) can reclaim another 20% or 25% through their tax returns.

What exactly does it mean?

I'm with II, was originally with TDW but they were taken over by II a year or two ago. Pay a quarterly fee and get so many free trades for that. Once you get to pension age you can start drawing down a monthly income but continue to trade with the remaining pot.

I'm hoping I can build a pot big enough to allow...and trade well enough... to be able to cover my yearly drawdowns with profits/dividends so the core pot remains untouched.

Thank you remo. Makes sense.
I am trying to get some way to start a pension pot. This really helps
Ta G
Have a good day and happy trading