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I currently have a workplace pension with People's Pension. My understanding is that this means that:

  • I pay into it each month
  • My employer pays into it each month
  • The government gives me a certain amount of tax relief each month

I have been paying into this pension for a few years and there is approximately 10k in there.

I'd like to:

  • Move this money into a SIPP and manage how it is invested myself.
  • Have my employer to keep paying into it
  • Still receive the same level of tax-relief.

I'm unclear on how my workplace pension and SIPP interact. Can I move effectively swap my workplace pension for a SIPP and have my employer pay into that instead? Or can I retain my workplace pension, but move the balance over in regular instalments?

What is the most sensible and cost-effective course of action?

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2 Answers 2

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Have done some further research here, and it seems there are two options, depending on your employer and current workplace pension provider.

  1. Keep your workplace pension and make one or more 'partial transfers' out of that pot and into your SIP. This way, you employer doesn't need to change anything they are doing, and you can effectively drip-feed funds from your workplace pension to your SIPP as desired. However, it seems that many workplace pension providers (including People's Pension which my workplace use) do not allow partial transfers, only full and permanent transfers.

  2. Set up a SIPP and convince your employer to pay into that instead (while continuing their contribution).

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  • Worth noting #2 here isn't an option for 99.9% of companies as they just want an easier life and to pay into one source.
    – Philip
    Oct 26, 2021 at 14:00
  • @Philip and unfortunately is seems that #1 isn't an option for many people because the pension their company chose doesn't support partial transfers. Oct 27, 2021 at 15:00
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Perhaps not a full solution, but I don't believe there is anything stopping you from simply setting up a SIPP and putting a small amount of funds into there each month (outside of your workplace pension)

The provider will then organise the tax reclamation each month as a part of your regular savings.

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  • No but you can't claim back NI from a SIPP if you do it that way. You might not have to pay NI if you pay into a workplace pension. Oct 25, 2021 at 12:27

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