Paying Redunancy into Pension.
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Shelley321
Posts: 2 Newbie
Background is this
:
Taking redundancy with a pay out of 125K (maybe 131k if company car allowance is added in, but that is not certain yet)
Salary currently 84k and I am 57
Old final salary pension transfer value 810k
All other pensions amount to 300k
I have a new job to go to paying 96k a year as a contractor and I will be setting up a LTD company. So I am not intending to take the pension yet, but will at 60.
I have an IFA appointment on 4/09/17 but I need help with a decision re paying the balance of redundancy payment into my current pension which has to be made before that date and I can't change the appointment.
I would love some help with the following questions:
Am I right in thinking I can take £30,000 tax free and then put the rest into my current pension, using current years allowance and any carry forward from the last three years? My employer is happy to do this.
How much tax would I pay on that amount ( 95K or 101k car allowance dependent) and what is the procedure for doing it. What would I need to do beyond asking my employer to go down that route for me?
Would the value of the pots mean I am needing to apply for LTA protection? or is it the amount of the actual pensions the pots pay out which affects that?
In total if left in situ and I took the 25% lump sum at retirement the combined pension would not exceed £50k PA which I believe is the figure I have seen mentioned in relation to LTA. Have I understood this correctly?
I understand I would need to revisit the issue at age 75 but do I need to put the LTA protection in place now or wait?
Would I still be wise or allowed( from a tax perspective) to set up a new pension within my Ltd company given the above figures?
Is there anything I am missing which would mean I should not go down the route outlined above?
Many thanks for any help with these questions. I hope I have posted in the correct forum?
:
Taking redundancy with a pay out of 125K (maybe 131k if company car allowance is added in, but that is not certain yet)
Salary currently 84k and I am 57
Old final salary pension transfer value 810k
All other pensions amount to 300k
I have a new job to go to paying 96k a year as a contractor and I will be setting up a LTD company. So I am not intending to take the pension yet, but will at 60.
I have an IFA appointment on 4/09/17 but I need help with a decision re paying the balance of redundancy payment into my current pension which has to be made before that date and I can't change the appointment.
I would love some help with the following questions:
Am I right in thinking I can take £30,000 tax free and then put the rest into my current pension, using current years allowance and any carry forward from the last three years? My employer is happy to do this.
How much tax would I pay on that amount ( 95K or 101k car allowance dependent) and what is the procedure for doing it. What would I need to do beyond asking my employer to go down that route for me?
Would the value of the pots mean I am needing to apply for LTA protection? or is it the amount of the actual pensions the pots pay out which affects that?
In total if left in situ and I took the 25% lump sum at retirement the combined pension would not exceed £50k PA which I believe is the figure I have seen mentioned in relation to LTA. Have I understood this correctly?
I understand I would need to revisit the issue at age 75 but do I need to put the LTA protection in place now or wait?
Would I still be wise or allowed( from a tax perspective) to set up a new pension within my Ltd company given the above figures?
Is there anything I am missing which would mean I should not go down the route outlined above?
Many thanks for any help with these questions. I hope I have posted in the correct forum?
0
Comments
-
I think the pensions forum is the right place for this query. I'm going to be paying some redundancy into a private pension too but your query is probably a little too complex for me to help with.
Your final salary pension is not valued at it's transfer value for LTA purposes but at a lower amount. I believe it's 20 times the annual payment plus the lump sum. Whereas the defined contributions pots will be valued at the amount in the when you crystalise them.
You can also pay money into a private pension or SIPP after your redundancy date before before the end of the tax year, and still claim the tax relief. So your employers pension scheme isn't your only option.
As I said, there's far more knowledgeable people on the Pensions forum so I'd definitely repost there for some better answers.Don't listen to me, I'm no expert!0
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