Join TSR now for chat about life, relationships, fashion and more…Sign up now

Pension SIPP account Withdrawal profits from investments

    • Thread Starter
    Offline

    3
    ReputationRep:
    I know there are charges; taxes etc associated from the withdrawals of pension money before the pension age etc.

    But with an SIPP account is it possible to withdraw profits from investments and not the amount that is initially deposited?

    etc -- x puts 1000 pounds in SIPP account, invests it and makes 800 on it, can x withdraw that 800?

    thanks in advance
    • Thread Starter
    Offline

    3
    ReputationRep:
    anybody?
    Offline

    3
    ReputationRep:
    You usually cannot take anything from a pension before pension age, the gains stay in the scheme until retirement. With a few exceptions that means from 55. At that juncture there are perms re what can be taken, if you vest part of a fund you may take 25% of that part tax free, any further withdrawl from the sum vested will be taxed at your tax rate within the particular year. Often someone will say take £10,000 gross re an entire segment, so £2,500 tax free, £7,500 say at 20% tax, net therefore £8,500.

    See attached:

    http://www.pruadviser.co.uk/content/...ment-benefits/

    There are people out there who will claim they can unlock the benefits, they tend to take hefty fees and unauthorised charges tend to take most of the rest, not something I would ever consider, very bad idea, here is HMRC guidance.

    https://www.gov.uk/guidance/pension-...rised-payments
    • Thread Starter
    Offline

    3
    ReputationRep:
    (Original post by DJKL)
    You usually cannot take anything from a pension before pension age, the gains stay in the scheme until retirement. With a few exceptions that means from 55. At that juncture there are perms re what can be taken, if you vest part of a fund you may take 25% of that part tax free, any further withdrawl from the sum vested will be taxed at your tax rate within the particular year. Often someone will say take £10,000 gross re an entire segment, so £2,500 tax free, £7,500 say at 20% tax, net therefore £8,500.

    See attached:

    http://www.pruadviser.co.uk/content/...ment-benefits/

    There are people out there who will claim they can unlock the benefits, they tend to take hefty fees and unauthorised charges tend to take most of the rest, not something I would ever consider, very bad idea, here is HMRC guidance.

    https://www.gov.uk/guidance/pension-...rised-payments
    Super, thank you!
    Offline

    3
    ReputationRep:
    (Original post by honestly)
    I know there are charges; taxes etc associated from the withdrawals of pension money before the pension age etc.

    But with an SIPP account is it possible to withdraw profits from investments and not the amount that is initially deposited?

    etc -- x puts 1000 pounds in SIPP account, invests it and makes 800 on it, can x withdraw that 800?

    thanks in advance
    Unless you are literally dying, do not even think about it.

    You will be hit with a massive penalty for doing this which makes it really not worth it.
    If you're intending on taking out the dividends why would you invest in a SIPP?
    Offline

    3
    ReputationRep:
    (Original post by DJKL)
    You usually cannot take anything from a pension before pension age, the gains stay in the scheme until retirement. With a few exceptions that means from 55. At that juncture there are perms re what can be taken, if you vest part of a fund you may take 25% of that part tax free, any further withdrawl from the sum vested will be taxed at your tax rate within the particular year. Often someone will say take £10,000 gross re an entire segment, so £2,500 tax free, £7,500 say at 20% tax, net therefore £8,500.

    See attached:

    http://www.pruadviser.co.uk/content/...ment-benefits/

    There are people out there who will claim they can unlock the benefits, they tend to take hefty fees and unauthorised charges tend to take most of the rest, not something I would ever consider, very bad idea, here is HMRC guidance.

    https://www.gov.uk/guidance/pension-...rised-payments
    Bear in mind your first £11,500 is tax free. But this is spot on otherwise, there is no way of taking money out of a pension other than at the age of 55 (rising to 57). Its not designed as a saving vehicle like a bank account. Apparently pension scams hit a record high in March of this year!

    Its also worth considering that trading shares through a SIPP is often very expensive compared to through another method.
    Offline

    3
    ReputationRep:
    (Original post by DonAchille)
    Bear in mind your first £11,500 is tax free. But this is spot on otherwise, there is no way of taking money out of a pension other than at the age of 55 (rising to 57). Its not designed as a saving vehicle like a bank account. Apparently pension scams hit a record high in March of this year!

    Its also worth considering that trading shares through a SIPP is often very expensive compared to through another method.
    Only of course if no other income using up the personal allowance.
    Offline

    3
    ReputationRep:
    (Original post by DJKL)
    Only of course if no other income using up the personal allowance.
    Absolutely!
    Offline

    3
    ReputationRep:
    (Original post by DonAchille)
    Bear in mind your first £11,500 is tax free. But this is spot on otherwise, there is no way of taking money out of a pension other than at the age of 55 (rising to 57). Its not designed as a saving vehicle like a bank account. Apparently pension scams hit a record high in March of this year!

    Its also worth considering that trading shares through a SIPP is often very expensive compared to through another method.
    Re your latter point it does depend on scale of fund, someone like Hargreaves Lansdown caps the annual charge at circa £200 p.a. on holdings in shares (funds are charged more), broking £11.95 or £8.95 per trade, but of course if you do not trade often and in larger sums it is not that bad. Once you are over say £100k the charges are not that painful in percentage terms , unless you buy and sell at a daft rate.
    Offline

    3
    ReputationRep:
    (Original post by DJKL)
    Re your latter point it does depend on scale of fund, someone like Hargreaves Lansdown caps the annual charge at circa £200 p.a. on holdings in shares (funds are charged more), broking £11.95 or £8.95 per trade, but of course if you do not trade often and in larger sums it is not that bad. Once you are over say £100k the charges are not that painful in percentage terms , unless you buy and sell at a daft rate.
    Wasn't aware of that. I work for another UK SIPP provider, and we are a lot more expensive, as its done through a third party.

    HL are a far bigger provider of that sort of trade though, so I suppose that it stands to reason they'd be cheaper.
    Offline

    3
    ReputationRep:
    (Original post by DonAchille)
    Wasn't aware of that. I work for another UK SIPP provider, and we are a lot more expensive, as its done through a third party.

    HL are a far bigger provider of that sort of trade though, so I suppose that it stands to reason they'd be cheaper.
    There are of course other fees when you start taking money out, I am not there quite yet.

    http://www.hl.co.uk/pensions/sipp/ch...interest-rates
    Offline

    3
    ReputationRep:
    (Original post by DonAchille)
    Wasn't aware of that. I work for another UK SIPP provider, and we are a lot more expensive, as its done through a third party.

    HL are a far bigger provider of that sort of trade though, so I suppose that it stands to reason they'd be cheaper.
    As long as it is not one of the SIPPs who do commercial property, their charges are daft and I have yet to come across one with any degree of efficiency, they are the most infuriating pension entities I have ever dealt with, that includes defined benefit schemes whose actuaries reports make your eyes bleed.
    Offline

    3
    ReputationRep:
    (Original post by DJKL)
    As long as it is not one of the SIPPs who do commercial property, their charges are daft and I have yet to come across one with any degree of efficiency, they are the most infuriating pension entities I have ever dealt with, that includes defined benefit schemes whose actuaries reports make your eyes bleed.
    No, we don't touch that stuff!
    • Thread Starter
    Offline

    3
    ReputationRep:
    (Original post by Reue)
    Unless you are literally dying, do not even think about it.

    You will be hit with a massive penalty for doing this which makes it really not worth it.
    If you're intending on taking out the dividends why would you invest in a SIPP?
    I have two accounts with the brokerage I use; SIPP and regular investments. I picked some excellent stocks for my SIPP account and it has out performed my regular and I just want to get my hands on that money. I'm in my mid twenties - so I don't want to wait so long.

    Stocks: Apple, Pepsi, Sirius Minerals, ICICI Bank (adr) and Lloyds have performed well in my SIPP account.

    My regular account is performing - reasonably well - and I would like to put some of the earned cash in my SIPP into regular.
    thanks for your reply anyhow!
 
 
 
Write a reply… Reply
Submit reply
Updated: May 26, 2017
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

Poll
Which party will you be voting for in the General Election 2017?
Useful resources
How much money do you spend a week?The ultimate guide to tax!Guide to student bank accounts

Sponsored features:

Web Legend

Win a Macbook Air!

Blog about setting up a website for a chance to win in our Web Legend competition.

Quick link:

Unanswered money and finance threads

Groups associated with this forum:

View associated groups

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Quick reply
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.