wife taking VR (NHS)

hassleblad

Hello, my wife is about to receive her VR payment. Age 52 worked in the NHS for the last 31 yrs. she decided that she is too young to retire so has deferred her pension with the expectation of getting back into work with the NHS within a year at a lower grade possibly and carrying on paying into her pension until she eventually retires.
Her VR payment is £114000 (2yrs salary) and she understands that the first 30k is tax free which leaves £84k so after taking into account her personal allowance of £7475 there will be tax to pay on the remaining £76525? Am I right in thinking that the final tax bill would be 20% on the first £37400 and then 40% on the remaining £39125?
thanks in advance for either confirming or correcting my assumption.

getmore4less

The 20% is only £35k now

Also you have to put this on top of the earnings so far this year(1/3 of £57k) and all future earnings this year will also be at 40%


Might be worth looking at pensioning some of it.

hassleblad

Think she can only put in an extra 5k additional into the pension but is going to check.

getmore4less

hassleblad wrote: »

Think she can only put in an extra 5k additional into the pension but is going to check.

Depends on the scheme, not looked for a couple of years but I seem to remeber you can buy £5k of pension.

That would use a fair chunk of the 40% taxed money.