Top up your Barclays Stockbrokers SIPP
As with all pensions, there are limits on the amount you can save into a SIPP that will qualify for tax relief
If you’re a UK resident under the age of 75, the general rule is you can contribute £40,000 or 100% of your earnings, whichever is less, to your pensions each tax year and receive tax relief. This is called your Annual Allowance. Subject to circumstances, you may also be able to carry forward unused allowances from the previous three years.
Pensions Tapered Annual Allowance
Introduced with effect from 6 April 2016, this new measure affects high earners: that is, individuals with income in excess of £110,000 and whose “adjusted income”, being earned income plus employer pension contributions, is over £150,000. It will restrict pensions tax relief by introducing a tapered reduction in the amount of the Annual Allowance. Thetapered Annual Allowance reduces by £1 for every £2 that the “adjusted income” exceeds £150,000, until the allowance is reduced to £10,000. Carry-forward can still be available, but if from a tapered year will be restricted to £10,000. This means that someone earning £180,000 will have a £25,000 Annual Allowance, while someone earning £210,000 and over will have a £10,000 Annual Allowance.
Money Purchase Annual Allowance
If you have taken money out of your pensions as taxable income using either Flexi-Access Drawdown (FAD), Uncrystallised Fund Pensions Lump Sum (UFPLS) or you were in flexible drawdown before 6 April 2015, your Annual Allowance is replaced by a Money Purchase Annual Allowance (MPAA), which is £10,000; and carry-forward will not be available.
Pensions Tapered Annual Allowance
Introduced with effect from 6 April 2016, this new measure will affect high earners: that is, individuals with income (including the value of any pension contributions) over £150,000 and who have an income (excluding pension contributions) in excess of £110,000. It will restrict pensions tax relief by introducing a tapered reduction in the amount of the annual allowance. The rate of reduction will be by £1 for every £2 that the adjusted income exceeds £150,000, until the allowance is reduced to £10,000. Carry-forward can still be available, but if from a tapered year will be restricted to £10,000. In order to facilitate the taper, “pension input periods” are being aligned with the current tax year (to 5 April 2016). Transitional rules to prevent savers from losing out could enable some people to contribute up to £80,000 in the current tax year.
Your Lifetime allowance is the maximum value that your pensions can be worth without incurring additional tax charges when you take pension benefits. From April 2016, the Lifetime Allowance reduced from £1.25m to £1.0m. This will be linked (to the Consumer Price Index) from April 2018. You may be able to claim ‘protection’ from the additional charge on excess values where your total pension rights are already over £1m at 5 April 2016. Details of this facility are expected to be published in the first half of 2016, possibly after 5 April. Similar protections have been available for earlier years and earlier reductions. You may need to consider the long-term consequences of this reduced allowance, and the possibility that the additional charges may be levied if the value builds up to over £1m, especially when you take into account the effects of compounding. Read about these 2016 changes for personal taxation
Things to remember:
The amount you can pay into a pension has become more complicated.
- Assuming that you still qualify for a full Annual Allowance, £40,000 or 100% of earnings is the total amount, being the amount paid in by you plus a basic rate tax rebate. So if you have made no other contributions this tax year and have £40,000 of earnings in the tax year you can pay in £32,000, and an £8,000 basic rate tax rebate will be added to your pension pot.
- You may not be able to receive tax relief on the full £40,000. If you earn more than £110,000 and have “adjustable income” in excess of £1150,000 then your Annual Allowance will be tapered.
- If you are subject to a Money Purchase Annual Allowance, the maximum that can be paid in is £10,000, or 100% of earnings if this is less. So the maximum that you would be able to pay into a pension is £8,000 plus the £2,000 tax relief that is reclaimed by the Administrator.
- There’s also the Lifetime Allowance to consider, which is the maximum value of all your pensions, without paying extra tax. For most people, from 6 April 2016, the LTA is £1.0m (previously £1.25m). It will then be index linked (CPI) from April 2018.
- Your pension allowances relate to all your pensions. So, you also need to take into account contributions made to any pensions you may have elsewhere, and increases in value within other pensions.
- Investments within pensions can fall in value as well as rise and your fund’s value may therefore also fall.
- Tax and pension rules can change in the future and the value of favourable tax treatment to you will depend on your individual circumstances.
Ways to top up your SIPP
Online – using a debit card
Simply log in to your Cash Manager to top up your SIPP. Once you’re logged into your account, you’ll find a link at the bottom of the Cash Manager page. This link takes you to the website of your SIPP administrator AJ Bell. They’ll process your contribution. You’ll be asked for your SIPP account number. You’ll also have to give your date of birth.
Alternatively if you top up using any of the options below, you need to complete an Additional Contribution form [PDF, 226KB] which should be sent to:
SIPP Administration Team
A J Bell Management Limited
Online – by electronic transfer
An alternative is to transfer money into your SIPP directly from your bank account. To make an electronic transfer, please call us on 0808 159 4953 or 0141 352 3937* (option 4) to get the bank account details.
To pay into your SIPP by cheque, please make it payable to ‘Sippdeal Trustees Ltd RE (your name)’ and send together with the Additional Contribution Form [PDF, 226KB].
It’s easy to make regular contributions to your SIPP by Direct Debit. All you’ve got to do is complete the Direct Debit form [PDF, 220KB] and return it to the SIPP administrator, along with your Additional Contribution form [PDF, 226KB]
From your MarketMaster® or ISA
You can transfer cash from your MarketMaster® or ISA into your SIPP by calling us on 0808 159 4953 or 0141 352 3937*
The information above is about the Barclays Stockbrokers SIPP. If you hold a Pension Trader Account with a SIPP from another provider, you have to contact them to arrange a top-up.