(Sipp) Self invested personal pension

@eddieb123
Tax relief on pension contribution will be for the tax year the contribution is made, otherwise HMRC would be disadvantaging those who don’t pay at source, via gross pay.

I’d ignore the 60k allowance in IE. It doesn’t apply to those who didn’t earn £60k, those with unused allowance from prior years, those contributing to multiple pensions, those drawing pensions…the majority of the population really.
Best idea is to do like you are doing: research, then keep your own records; or get an accountant if you have complicated arrangements.

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That’s my point - as the tax relief will be for the year the contribution is made (not neccessarily the year it actually arrives in the account), it makes a lot more sense to reflect this straight away. I agree it won’t be relevant in many cases, but it will for some, and would just be a more logical way of presenting the information

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@eddieb123
Assuming the outstanding allowance reduces when the HMRC relief is subsequently credited (disappointing if not), your point about allocating to the correct tax year is still valid, and the risk of over-contribution due to the lag.
Problem with the calculation is it depends on your expected income and subsequently your actual income (ideally for last 3 years), and pension status.

Given those issues and that in reality everyone’s pension contribution limit is different (income, tax bracket, previous income, previous contributions, pension status), the calculator can’t give a personal answer. I’ve over-contributed previously due to incorrect calculations.

Hi there,
I didn’t realise you were only going to roll this out to those who had signed up for email updates. I have now just signed up. When can I expect SIPPs to be rolled out to the rest of us please?

Hi Invest Engine reps,
It was never mentioned you had to already have an account set up, I pre registered a while back and no emails came. I re registered today then found this chat. Please can you ensure you enable my account to open a SIPP. Thanks for your help.

Problem with the pre-crediting suggestion is the calculation would depend on your expected income and must adjust subsequently for your actual income (ideally for last 3 years). Eg. maybe 40% will be/was paid on some of it so the HMRC relief can’t be known by IE.

Tax relief into a SIPP is always 20%, regardless of actual tax rate for the individual, anything higher must be claimed back by the SIPP holder via tax self assessment.

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@Pinch
Correct (HMRC returns 20% only)…
my concern was the difficulty for those who didn’t earn 60k+, that the IE calculation could confuse.
As IE doesn’t know anyone’s income, the IE calculator can’t tell how much allowance is available.

GENERAL POINT For anyone looking to explore the topic, google ‘pension contribution tax calculator’ and enter some numbers into one you find. Read up about pull-forward of unused allowance from prior years too though.

@nedjohn
Hi, I’m not sure I follow.

HMRC states that 100% of UK income up to a limit of £60K in the current tax 2023/2024 can be paid into all pensions - that includes SIPP’s and workplace pensions as applicable.

That means to me that:

If a person earns, let’s say £30K for the tax year 2023/24 and takes part in a workplace pension where they pay in 5% (£1.5K) p.a. they could choose to either 1) up their contributions to maximum 100% salary within the workplace pension or 2) they could pay the remaining amount of £28.5K into a SIPP (or a number of SIPP’s) with IE and other providers.

Each provider (IE, other providers/workplace pension) would claim tax relief for the money which has been paid into its SIPP/pension scheme.

As everything is notified to HMRC and registered under the same National Insurance number it is easily traceable for HMRC to make sure that the correct amount of money receives the tax relief due for the current year - i.e. the aforementioned £30K salary in total for this person.

Any overpayments would need to be able to be offset against the remaining allowance from the previous 3 tax years salary max.

At £30K this person is a basic rate tax payer - so only 20% tax relief would be payable - this person doesn’t need to take any further action.

If the scenario is for someone who earns £60K then the tax relief payable would be 20% into the pensions, which comes automatically, and the remaining 20% need to be claimed via self assessment with HMRC.

As Pinch has said - the extra 20% relief you get as a higher rate tax payer comes through a rebate. Eg. If a self employed person earned 120k in a year year, they could make a personal contribution of 48k, which would be topped up to 60k; and they’d then claim a 12k rebate on their tax return.

For what it’s worth, the way I’ve suggested they should reflect the relief instantly is the way that Vanguard displays it in their sipps, and I think it’s the way that minimises chances of accidental overpayment

you are correct @Pinch @eddieb123. I was thinking about the overall effect. The extra relief for a higher-rate tax payer must be claimed subsequently. Prior comments aligned.

So for me, the issue is that the calculator gives an incorrect limit for: those who earn less than 60k, those with unused allowance in prior years, those who accessed pension benefits (possibly everyone). Nice idea to give a running total, but can be misleading.

Hello, I can see that currently the ability to fund another person’s SIPP (such as adult child / spouse etc.) is not available. I know this can be done on other platforms such as Vanguard. Do you plan to make this available in the future? If so, do you have a rough estimate of when? Thanks.

@tom.winterton - you mentioned that Transfers / Investing should all be fully working.
However, support are saying I can’t do any SIPP transfer (from one SIPP to Invest Engine SIPP)…
Please confirm - as I now have two SIPPs so double fees… for the duration that this is an issue.

@tom.winterton and all
we could perhaps used some definition clarification.
Transfer - is for transfers from one provider to IE or IE to another provider
Deposit - (not transfer) is the action of depositing money into an IE produce (ISA, SIPP, General, Business)

This will avoid misunderstandings.

Further to this - support have now said that there will be no SIPP fee charges until 2025.
This would make sense given the lack of Transfer functionality - and avoid any customers incurring double-charging as a result of a lack of ability to transfer an existing SIPP from another provider to IE SIPP at this time.
Hopefully, sometime within 2024 the ability to transfer will be released - that way it will avoid any double-charging taking being potentially imposed on client.

How could you be double charged for an inability to transfer? IE charge based on value in the SIPP, so if you haven’t transferred yet the IE charge would be zero.

To clarify

The frustration is that I’m getting different messages from Invest Engine.

One person in Support has stated that the IE SIPP is free for 1-year from opening.
Another in Support has stated that the IE SIPP is free until 2025 (so practically 1-year at time of writing).
@tom.winterton has said it is 0.15% from Day 1.

They can’t all be True statements.
I have investments in both the IE SIPP and another provider’s SIPP.
Support has said that they can’t currently handle Transfers.
@tom.winterton said that Transfers should all be fully working.
Support clarified that Tom meant to say Deposits - but that’s a big difference.
Again I’m trying to find out which is True?

So what I’m trying to clarify is whether I’m stuck paying for 2 SIPPs (given I’ve got investments in both)?
Whether I’m able to transfer or not?
Whether the IE SIPP is free - if so, until when or how long for?

The ideal outcome.

  • IE SIPP is free for 1-year from opening
  • IE SIPP can handle transfers
  • I can swiftly transfer my SIPP (with another provider) into my IE SIPP.

I also signed up, but didn’t get an email and don’t have the option to create a SIPP. Is there still the chance of joining the trial? @tom.winterton

Hey there, to clarify InvestEngine SIPP fee is 0.15% from Day 1. We offer ‘instant transfers’ as a method to contribute to your portfolio/s. Transfers from other pension providers will be available in the next couple of months, as our team finalise the process. We will let our clients know as soon as it’s released.

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Hey Spear, please drop our Client Services team an email at support@investengine.com and they’ll be able to help you further.

Hi Dee,

naturally - due to the error in communications by Invest Engine incorrectly stating to me that it would be free until 2025 - you are going to honour that.

Not biggest it’s a huge fee - but out of good principle.

The amount is going to app £0.50

Kindest Regards,

Hello, please email us at support@investengine.com if you haven’t already to discuss this further.