I am debating with myself whether the annual permitted £3600 (£2880 net) SIPP contributions are worth the hassle and loss of easy accessibility when in drawdown.

Apart from my emergency fund all my assets are in my SIPP and ISA. To fund the contributions I could either take some additional tax free lump sum and recycle into my SIPP, or move £2880 from my ISA to my SIPP.

However, apart from being able to take 25% of this contribution as tax free lump sum, the other 75% will be taxed at 20% when taken on top of the £12570 I am already withdrawing annually. From my calculations (which may not be correct), I will gain 5% or £180 from doing this, once all the tax uplift going in and deductions going out are factored in. So not really sure it is worth it.

Wondered what others’ opinions are on further SIPP contributions when in drawdown?

Not helped by the Governments proposed 40% tax raid on someone's demise.

I've started doing this. I ran the numbers and it's still worth doing from my perspective, as you are getting investment growth on the tax relief element.

Caveats:

1. IHT - the planned changes probably mean that it's not worth doing for most investors. Mine's all going to charity, so not an issue. Bear in mind though, that the changes may not happen - they are proposals only at this point. So you risk missing out on a couple of years' worth of contributions.

2. Time horizon. If you plan to withdraw in less than about 10 years then it may not be worth it.

As regards the pension recycling rules, it's not an issue as the amount is below the threshold (which I think is £7.5K if I recall correctly). (Also, if your tax free cash from the rest of your SIPP was taken more than 2 years ago, it's not an issue anyway.) As always though, watch out in case the rules change.

Edit:

Just to add a third consideration: if you have already taken around / over £100K in tax free cash, bear in mind that if they do decide to restrict tax free lump sums, it won't be worth adding to SIPPs.

The £180 may at least contribute towards both your platform and trading fees.

Once the payment is set up there's no admin to do.

What OM said.

I do it for both me and my wife and will do it for as long as I can. £180 (x2) does not sound a lot but over the next 30 years (hopefully), it soon adds up (remember to calculate the growth element too).

I’d do it for a tenner per year just for the satisfaction of depriving, whichever government is in power, the chance to waste even more of my hard earned.