Do I need my SIPP?

[Heatherbell1978]

I pay monthly into a workplace pension - it's a salary sacrifice scheme which I can adjust monthly so all very easy to manage.

Years ago I opened a SIPP, I worked in a related finance role when the pension regs changed (2006 maybe?) and someone told me I should open one! Small monthly payments but I now have £16k which I recently moved to Wealthify.

Should I just move this into my bigger workplace scheme or is there any benefit in having this pot which I'm paying £50 a month to?

Compare the terms and conditions.

Can be worth keeping if, for example, the SIPP allows you to draw it earlier. And definitely worth keeping if it is small enough to qualify as a 'small pot' - which can be drawn as a lump sum without affecting the rules on paying into other pensions (I have a feeling that might be under £10k, though).

SIPPs may also allow a wider range of investments, if that's something you're interested in. Not a factor if you're just sticking to standard retirement funds though.

I agree with @BinturongsSmellOfPopcorn .No harm, and some benefits to keeping it, as long as the fees are reasonable.

You don't say what your time horizon is... If retirement is a decade or more away, then maintaining your SIPP contributions could be worth it in terms of investment growth (depending on how the workplace pension fund is invested), but against that, you will get more for your money by putting the £50 per month into the salary sacrifice scheme if you can (NI relief as well as tax) in preference to the SIPP.

I think it also depends what your salary is and whether you are a higher-rate taxpayer. If you are, you'll save more tax by making additional voluntary contributions to your workplace pension than by investing in your SIPP.

I'm 45 and retirement will likely be no later than 65. Ideally 62. And a higher rate tax payer so potentially might be better off increasing my workplace contributions by that £50. At the moment I'm hammering my WP pension (40% of salary) but that will be a temporary thing. It's nice having this extra wee pot but in reality just not sure what the point is.

Ah, if you're already making AVCs, are you still paying higher rate tax? If not, then it probably doesn't matter where you save the £50, so the potential advantages PPs have mentioned might have more weight.

Good question, so I'm making enough contributions through work to scrape into the lower tax band but that is a fairly temporary thing and I'll have to reduce contributions early next year. So I guess I'll get the higher rate tax benefit on all my pension contributions through work but only those into the SIPP if I do a tax return (as they automatically add 25% but I'm eligible for 40%). So the work one might be better from that perspective if I've understood that correctly.

I find doing tax returns massively tedious so would be tempted to keep it simple by just paying into the workplace scheme. But actually I think you can backdate your request for tax relief for at least a few years, so if you haven't been making AVCs for long, you might be able to claim back some tax on your earlier SIPP contributions if you haven't already?

Salary sacrifice is worth it also for basic rate taxpayers as you save 12% NI so 32% tax saving altogether.