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Sipps Pensions Exeter
SIPPs Contribution Limits
Self Invested Personal Pension
You can contribute up to 100% of your pensionable income into a SIPP up to the annual allowance which is currently £40,000 and benefit from tax relief at your highest marginal rate. You can pay more than £40,000 into your SIPP, but contributions in excess of £40,000 will not receive tax relief. Legislation has been introduced allowing investors to utilise unused tax relief from the three previous tax years. Therefore it may be possible to make a contribution over £40,000 one tax year and still benefit from unused tax relief.

Pensionable income, are types of income that you receive in lieu of work done i.e. income from employment, self-employed income, bonuses and benefits in kind. Investment income such as dividend income, rental income or pension income that you are already receiving does not count toward your pensionable income.

Company Directors of a limited company can make contributions directly from their business. Tax relief in this case is against corporation tax, provided it is an allowable deduction on the business accounts. The additional benefit to employer [13.8%] and employee [up to 12% depending on earnings] is that National Insurance contributions can be mitigated.

Great care must be taken as contributions must pass the whole and exclusively for the purposes of trade test, this is especially pertinent to controlling Directors. For controlling Directors the total remuneration package including pension contribution must be comparable to unconnected employees carrying out a similar task.
  Pension funds consolidation is the most common way to start funding fund your SIPP. Due to the higher costs, we will consider people saving for retirement with a total pension fund of £50,000 who have the capability to make further significant pension contributions before retirement. To make using a SIPP for retirement planning without any existing pension fund economical we would aim to build a fund of £50,000 over a 5 year period. This can be done with annual lump sums or monthly payments totalling at least £10,000 per year.

Some people have built up separate pension plans from National Insurance rebates [SERPS and S2P] commonly known as your Protected Rights. Until recently it was not possible to combine your Protected Rights with your own and your employer's contribution. However, changes to the pension rules have made it possible to combine your pension into one simple to manage plan.

Ordinarily Pension fund withdrawal plans would have needed at least £150,000 after tax free cash to make them cost effective. However, increased competition amongst pension providers, changes to the rules relating to annuity purchase and pension fund death benefits have seen smaller fund become viable.

Evolution in the pension market is also creating a new range of products, collectively known as the third way annuities, offering an alternative way to take pension income. These are relatively new and benefits are considered on an individual basis – Contact us for further information.

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Colyton Offices
The Mews, Queens Street, Colyton, Devon, EX24 6JU
Tel: 01404 598 168 
Exmouth Offices
32 Rolle Street, Exmouth,
Devon EX8 2SH
Tel: 01395 207 350
Exeter Offices
Briar House, Clyst Honiton, Exeter, Devon, EX5 2LZ
Tel: 01404 598 168
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Raymond James Investment Services Limited is a member of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority (Updated 13/09/2018). Registered in England and Wales No. 3779657. Registered office: Broadwalk House 5 Appold Street London EC2A2AG. | RAYMOND JAMES is a registered trademark of Raymond James Financial, Inc. | Legal Disclosures