magazine archive
magazine archive
Ask Rachel
Should I move dividend payers out of my SIPP to take the income?
Thursday 24 Jul 2025I have a question about SIPPs and dividends. My SIPP is geared to generate significant dividend income in retirement, but are the dividends classed as income, so rather than 8.75% tax I’d be liable for the 20% basic rate of income tax (as long as I don’t breach the £50,270 limit)? I don’t want to...
How do the carry-forward rules on pension contributions work?
Thursday 17 Jul 2025I could do with clarification on the carry forward rules. The guide is that I must have used up my full allowance for the current tax year. I am taking very low salary as a director of my own business so my earnings are capped at £12,570. Last year I put the maximum I can personally place into my...
Can I cash in my pension and invest the money myself?
Thursday 10 Jul 2025I am seeking help regarding cashing in a pension plan completely to invest the money myself, or withdrawing some money from the plan to invest myself. I am seeking help regarding cashing in a pension plan completely to invest the money myself, or withdrawing some money from the plan to invest...
Can I transfer assets from a general investment account into a SIPP?
Thursday 03 Jul 2025I have a GIA (general investment account), currently valued at around £170,000. I’m looking at how best to preserve this investment in the most tax efficient manner. I would like to transfer from the GIA into a SIPP. However, I realise any gains over the £3,000 CGT allowance will be taxed at 18% as...
Can you help me understand the situation now the lifetime allowance has been removed?
Thursday 26 Jun 2025I have two pensions, a BT pension (defined benefits, which I have started to draw from) and a SIPP which is yet to be crystallised. At the time of starting to take my workplace pension in 2022/23, I was told that this amounted to 27% of LTA (lifetime allowance). I took a lump sum as well as a...
How much do pension contributions reduce my taxable income by?
Thursday 19 Jun 2025I’m likely to become a higher rate taxpayer this financial year. If I choose to pay into a SIPP for the tax benefits, how much do I need to invest to reduce my taxable income by £100. Is it £100 or £80? Also how do I then claim the tax back to allow for the 40% rate I will have paid on that £100?...
Can I contribute proceeds from the sale of a property to my SIPP?
Thursday 12 Jun 2025I am currently taking taxable income from a SIPP in drawdown. I will be completing on the sale of a property shortly. Am I able to contribute £10,000 of the sale proceeds from the property to my SIPP under the money purchase annual allowance? Rob Rachel Vahey, AJ Bell Head of Public Policy, says:...
How will I know how much my pension will be worth when I retire?
Thursday 29 May 2025I have a deferred pension due on my 65th birthday. What time scale before this date should I expect to receive details of what the pension will be going forward? Is there any legal requirement on timescales, or best practice, for getting a clear understanding of what information a person should get...
What is the 4% rule and how does it work?
Thursday 22 May 2025I am thinking of starting to withdraw an income from my SIPP later this year. I have heard something about a 4% rule I should apply when working out how much to take from my SIPP. What is this, and is it something I should be following? Kamal Rachel Vahey, AJ Bell Head of Public Policy, says: Over...
Explaining the lump sum allowance and the money purchase annual allowance
Thursday 15 May 2025If a person has defined benefit pension and two SIPPs, can they take a tax-free lump sum from that pension in, say, year 1, and subsequently a monthly taxable income; then in, say, year 4, take a tax-free lump sum from SIPP 1 and start drawdown; then, in, say year 7, take a tax-free lump sum from...