Originally posted by SueEllen
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It's not hard to run the arithmetic to work out payback horizons. If you are inside IR35 (or want to act as if you are) then it is likely to be about 7 years, depending on age and therefore max drawdown rate. I.e. After 7 years the pension option overtakes the salary option.
IMHO both inflation rate and rate of investment return are irrelevant to the comparison since they will both apply equally to the salary+saving and the SIPP options.
However I would caution that the existing untouchability of pensions savings is not logically compatible with Osborne's free access to pension funds, and I expect that protection to disappear.
Edit: I am assuming max drawdown rate as per the old regulations because I understand that exceeding that rate, as per Osborne new regs, causes limitations on further input to the pension. I may be wrong about that, I just haven't examined it.
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