Transfer Redundancy payment to Pension Fund

sylblake

My husband is about to take voluntary redundancy, he will then be taking his company pension. Is it possible to take the first £30,000 redundancy tax free, put the remainder into pension fund. Once it is in the pension fund then take 25% of it as a lump sum and the remainder as additional pension thus avoiding paying higher rate tax on it?

I read somewhere that this might be possible - are there any implications?

Many thanks.

dunstonh

If you really feel you want to give up the capital like that and not invest it for income instead, then it is an option.

sylblake

If we took it as redundancy we would pay £11,000 tax but if it we could put it in pension we could (if allowed) take £7000 lump sum and an extra amount (not sure how much yet) in pension per year. Would this be a disadvantage?

Many thanks