AlR:
Not only knowledgeable but eloquent too
An excellent service.
May I put something to you for scrutiny so that (myself and) others may benefit.
Scenario, based on recent budget results:
In theory, I pay £20,000 cash lump sum into my pension fund.
HMG adds 20% to said fund which is approx £5100. Fund now worth £25100.
I claim back (via a cheque from HMRC - if I ask them to do it this way, rather than via PAYE coding) my extra higher tax relief of 20% which is another £5100.
With that money, I put it back into my pension fund @ 20% tax relief which is: £1200 approx. I then claim the higher tax relief on this @ £1200 by cheque.
The £1200 goes into the fund...dah di dah HMG adds £300 and I claim back the extra higher relief of £300 and put this into the fund.
Final result is:
£20,000 front loaded and voila we see £33,000 in the fund.
A return of 65% TAX FREE.
THEN.........(when I retire / over the age of 55)....I take it ALL out of the fund i.a.w. the new regime, some of which is completely tax free and the rest at my then current tax rate, say 20%.
65% front ended return and 20% back ended.
[And this is before I actually work my SIPP to maximise returns].
Please please tell me this is merely a pigment of my constipation and I will wake up shortly
