Redundancy and Pension

PC23719

Hi all,

Redundancy looms. The first £30k is tax free, the rest is not. However I have been told that you can pay the rest into your company pension fund tax free and then withdraw it as a lump sum a few days later.

If it's too good to be true....

Anyone know the facts? I would hate to pay into the pension fund and then have my redundancy trapped in there.

Cheers

getmore4less

You will need to check your pension scheme.

shuze

It depends on a few things:

your age
how near to retirement are you (check your company scheme)
how much you earn
The rules of your pension scheme
the size of your existing pension pot(s) etc etc

In any event, you won't be able to take the 25% tax free lump sum from your pension until you are at least 55 years old. Doing this will also affect your future pension entitlement.

Also, there are rules about how much per year you can contribute to your pension, and be aware that the government is in the process of introducing new (quite complicated) rules about taxation of pension contributions.

It is really too complex for a chat forum - you should talk to an IFA, especially if the sums involved are large.

PC23719

Thanks all.

So you have to be 55?

I think I'd better ask the pensions folks.

Cheers Pete