HMRC warns people who 'have not reached State Pension age yet'

James Rodger
·2-min read

HMRC has issued a warning to people who have "not reached State Pension age" yet. The taxman and government department has spoken out on social media and moved to issue a pensions warning as it 'can't advise' on tax issue.

The taxpayer asked: "I’m a retired teacher who claims Teacher Pension. I also work part-time. I have used my ISA Allowance. Can I also set up a SIPP in this tax year?" HMRC replied: "Most SIPPS are not linked to ISAs unless it is a specific type.

"Unless the SIPP is linked, which the pension provider should tell you, there wouldn't be an issue." The taxpayer then said: "Just to explain more, I’m not claiming State Pension yet. However, if I were to stop my supply teaching, can I still open a SIPP and what is my investment limit per year?"

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HMRC responded: "There is a teacher pension and some savings. Currently got a cash ISA." It replied through its customer service team saying: "I am happy to continue working part-time but interested to know if the SIPP is possible if I stopped working."

"Put simply, I think I need to remain in employment in order to invest significantly into a SIPP," the Twitter/X user said, typing: "Allowance being up to £60,000. Otherwise it’s reduced to £2,888 if I’m fully retired. Correct?"

HMRC replied: "Yes, you do need to have a taxable income in order to get tax relief on it above the £2,888." The taxpayer then said: "I am a retired teacher receiving a teacher pension. I am also working as a supply teacher and paying into a work pension.

"Can I also open a SIPP or would it be better to pay into the work pension in terms of added funds. If I stop work, can I open a SIPP?" HMRC said: "You would need to get advice from a financial adviser as to whether the work pension or SIPP is better for you, that's not something we can advise on.

"Yes you can have both a SIPP as well as a work pension and pay into both."

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