26 Apr 2019

A question about : Pension contributions as savings

This is about getting good interest on savings for those nearing retirement so 50+ from April. Savings rates are currently rubbish so this is an alternate idea if you have some spare cash.

If you contribute to a pension, say your own sipp, then you get tax relief at source for 100% of your salary. So if you earn say just Ј10k then even though you haven't paid any tax you could pay Ј8k into a sipp and get that bumped up to Ј10k. An instant 20% profit. If you're near retiring then you can get 25% of your pension pot back as tax free lump sum so you can just think of it as depositing for a fixed period. Naturally don't put in what you may need.

This won't be for everyone. You'd need to have a salary but have lots of spare cash (just won the lottery, been left a large sum of money, etc.). Even if you have no salary you can put in Ј2880 and get than made up to Ј3600 each year.

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    Category: 
    Over 50s Money Saving
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