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Worth doing SIPPs for Retired Husband & Wife?

Husband & Wife Thinking of Taking Out Sipps For £2,880 Net Per Annum Each. How Expensive & Complex?

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Client and wife are about 70 years' old. Both have state pensions of around £8,000 per annum and he also has occupational pension of £21,000. So he is basic rate, she is not a taxpayer.

The have no further taxable income, but have share ISAs to the tune of several hundred thousand pounds.

Client read the following article in the Daily Telegraph:

https://www.telegraph.co.uk/finance/personalfinance/investing/sipps/1150...

Because of the article, client is thinking of paying £2,880 net each per annum into SIPPs for self and wife until age 75.

But is it that straightforward, or is the cost of advice and setting up costs etc. going to prove prohibitive. Also, I am not yet quite sure what client is wanting to achieve from this exercise.

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By PBH64
14th Nov 2019 08:01

If they do it on their own as execution only it's reasonably cheap. You need to be careful that you don't give financial advice unless you're authorised by the FCA. What's in it for her is £2880 in and £3600 invested with a chance that the £3600 and investment growth can come out tax free. What's in it for him is an effective tax rate of 15% on income and gains and a boost of £180 from the tax free element effectively attributed to the tax relief given. The amounts ought also be outside IHT but that's down to the pension scheme's terms and conditions.

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Replying to PBH64:
By penelope pitstop
14th Nov 2019 20:24

Meant to ask if it is okay for husband to pay into stakeholder if he has state/occupational pension of £29,000 per annum.

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By paul.benny
14th Nov 2019 12:36

What's the point of doing it as a SIPP? That wrapper just seems to add fees and complexity. A simple stakeholder pension (?) invested in tracker fund would seem to do the same job of getting 'free' tax relief for lower cost.

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Replying to paul.benny:
By penelope pitstop
14th Nov 2019 17:01

My concern is the financial adviser going to town on the client fact find etc. and charging the earth for doing diddly squat.

Client is fairly well switched-on financially and all he needs to have is a pointer in the right direction, a shopping list of available funds and then advice on how he and his wife can finally extract the funds at age 75 with minimal tax and financial adviser costs deducted/charged.

Also, can he invest in a stakeholder without going through a financial adviser.

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Replying to penelope pitstop:
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By paul.benny
14th Nov 2019 18:00

penelope pitstop wrote:

Also, can he invest in a stakeholder without going through a financial adviser.

Yes. The likes of Hargreaves Lansdown, Fidelity, Cavendish offer execution-only services.

Point your client to Which? and Moneysavingexpert.com for general guidance; there is also stuff on gov.uk about drawing pensions.

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