RE: Divi24 Dec 2021 10:28
Morning dazzle, with interactive I have the three a/c, trading, ISA & SIPP, £20 a month instead of the £10, but dealing costs are £3.99 a trade.
SIPP, we can all put in £2880 a year regardless of our situation, and that gets grossed up by an auto tax rebate about 8 weeks after depositing the money, making it up to £3600.
We can put as much as we like into our pension, but anything above the higher rate of tax, we have to claim the rebate ourselves in our self assessment year end.
Obviously we only get the rebates equal to our earnings.
In layman’s terms, if we earn £20,000 in wages and put it all in our pension, it gets grossed up, let’s say for arguments sake, to £24,000.
No point in putting above our earnings because we only get tax rebates on our earnings.
But we have to live off something, so unless we have savings to live off, it’s impossible to put all our wages away.
Very rough explanation, national insurance and other factors to take into account, but a basic take on it.