Pension. Please guide.

[adubya]

iWeb

[jamesbrown]

iWeb

Yes, good platform too, also very cheap. I use them for my S&S ISA and regular trading accounts.

[sludgesurfer]

9.5% decade to decade growth?
That’s bloody awful.
You sure you know where to invest?

I not sure if this was aimed at myself but the absolute returns of my favoured world index tracker (Fidelity Index World) over 1, 3 and 5 years have been 12.8%, 33.8% and 98% respectively. With a total expense ratio of 0.12% it's about as good as I've been able to find.

Some, like this guy argue that is all the average investor will ever need. Not a strategy I personally adhere to but it's certainly one of my core holdings.

Why a world equity index tracker?

[jamesbrown]

I not sure if this was aimed at myself but the absolute returns of my favoured world index tracker (Fidelity Index World) over 1, 3 and 5 years have been 12.8%, 33.8% and 98% respectively. With a total expense ratio of 0.12% it's about as good as I've been able to find.

Some, like this guy argue that is all the average investor will ever need. Not a strategy I personally adhere to but it's certainly one of my core holdings.

Why a world equity index tracker?

Can't beat a cheap, broad-based, tracker in the long-term. Wannabe traders routinely get schooled in that (and I pick stocks too, but only for fun - SIPP is all about broad-based funds).

[Fred Bloggs]

FWIW, Interactive Investor will charge you a flat £20 per month whether you have £1 or £10,000,000 invested with them in trading account/ISA/SIPP. Hence my comment about recommending them for larger sums. As a bonus, regular investments are free and you get one free trade per month aside of that. I usually use my "free" trade (£7.99) every month so the real cost of my portfolio there is extremely low. Of course, other solutions are available out there will suit other people just fine too.

[jamesbrown]

FWIW, Interactive Investor will charge you a flat £20 per month whether you have £1 or £10,000,000 invested with them in trading account/ISA/SIPP. Hence my comment about recommending them for larger sums. As a bonus, regular investments are free and you get one free trade per month aside of that. I usually use my "free" trade (£7.99) every month so the real cost of my portfolio there is extremely low. Of course, other solutions are available out there will suit other people just fine too.

Agree, that is pretty good for large amounts.

[sammy2020]

wholly and exclusively test

I think you’re confusing personal and company contributions. You will save CT with a company contribution if it meets the wholly and exclusively test (it will). Conversely, if you make a personal contribution from your after tax income, then you will get a notional refund from HMRC. You don’t get both.

Thanks, that is most helpful reply. So for £9500 salary can I pay myself £40k pension from my limited company. I am currently sole employee but might add spouse in near future. Not asking for advise.
What is " wholly and exclusively test " exactly? Can't find any answer online in layman's language.

[jamesbrown]

Thanks, that is most helpful reply. So for £9500 salary can I pay myself £40k pension from my limited company. I am currently sole employee but might add spouse in near future. Not asking for advise.
What is " wholly and exclusively test " exactly? Can't find any answer online in layman's language.

Yes, for a company contribution, there is no connection between your salary and the size of the company contribution, unlike a personal contribution. The test for deduction against CT is that the contribution must be wholly and exclusively for the purposes of trade. In practice, this test is vague, but it is only something to worry about if there is an obvious non-business purpose. For example, if you were making a massive pension contribution to a partner who had almost nothing to do with the business, that would be a red flag. You can find more info and examples in BIM46035, but it is really not something to worry about unless there is a clear non-trade purpose.

[Fred Bloggs]

Thanks, that is most helpful reply. So for £9500 salary can I pay myself £40k pension from my limited company. I am currently sole employee but might add spouse in near future. Not asking for advise.
What is " wholly and exclusively test " exactly? Can't find any answer online in layman's language.

In essence, yes. However, I would certainly hesitate to say that for a typical spouse's role in a one man Ltd Co. Opening a letter and updating FreeAgent doesn't really justify a £40,000 pension contribution, does it? That's going to be a very tough call saying it's "wholly and exclusively for the purpose of trade". Because it isn't, it's mainly about extracting significant money from the company whilst avoiding corporate and personal taxes. Of course, that's just my opinion.

[rootsnall]

iWeb

I'm also IWeb, particularly cheap if you do a lot of trades, £5 a pop.