Pension recycling?

[TheStrangler]

This declaration is mentioned on the forms you have to fill in.
It says something about 40% tax deduction on lump sum if you don't declare.
Am I right in thinking that this only applies if you were to take your lump sum and pay it straight into another pension, for example, a SIPP (which gives you tax relief apparently?)
If so, when does this cease to apply for example if you held the lump sum in a savings account or something for 6 months or a year, then paid into a SIPP would that still fall fall foul of the tax rules?
Or would this apply to end of tax year then you're free to do as you wish?

[RobertT]

Most people probably won't fall foul of pension recycling rules, but you also have to make sure you don't put too much into your SIPP and break annual allowance limits.

If you take a DC pension, which you will be doing when taking any AVC's you may have, you can then only pay £4,000 per year into a pension from then on. So just whacking your lump sum straight into a SIPP will break those rules.

If you just have your normal RM DB pension and no AVC's, then annual allowance contribution regulations aren't applicable.

Recycling info: https://www.pensionsadvisoryservice.org ... -recycling" onclick="window.open(this.href);return false;

Annual Allowance info: https://www.pensionsadvisoryservice.org ... -allowance" onclick="window.open(this.href);return false;

[lordthornber]

You'll be hard pressed to break the recycling rules. One of them is raising direct debit amounts to into, say, a SIPP. I would certainly caution about putting a lump sum in anyway, drip feed it in to smooth the troubled waters so to speak. Some folk can't be bothered of course, but experience tells me it's the best way to invest. Each to their own though as always.

[TheStrangler]

Thank you both for your replies.