Redndancy and Pensions

redvalley

Hi. I could be made redundant. Likely to get one years pay approx.£90k. I have a mortgage of £100k and pensions pot value of about £400k. How can i ensure i don't pay too much tax. Should I ask for some of the redundancy money to be paid into my pension to enable a greater cash amount of 25% to be taken out? I should also state that I wouldn't expect to get other employment as I'm 59.

Any help would be greatly appreciated.
Thank you.

atush

Well, it will all depend on how much you hae saved outside your pension, and your actual living costs. The pension you would get if you took it early, and if you have a spouce or partner and their state of employment.

I'd also like to know why you wont be working further than 59, as it is perfectly possible. After all, if you are lookign for work youcan count on JSA for at least 6 months. Why not give it a try?

Given your stated pension and redundancy pmt you must have skills of a marketable value.

redvalley

Thank you for your reply. I have no savings but do have a wife and 2 children under 14. There is no other income. I would have my mortgage payment covered for 12 months by insurance and a car loan also. Thanks for the JSA advice. I have worked continuously since 1969 and wih my current employer since 1980. After a break maybe I will feel diferent but at the moment I feel tired and would like to be able to enjoy a bit of life away from the City.

getmore4less

Might be time to consider a relocation and retirement(semi).

you have significant debt and comitments with the kids so assess the income requirements.


depending on asset valueswich look to be mainly a house there may be opportunity to relocate eliminate debt(reduce income requirements) and maybe reduce other costs.

Might be time the OH considers work and you look at retirement SAHD(stay at home dad).


Payment protections will probably require you to look for work, many require you to sign on and claim JSA.

atush

Does your spouse work?

I have to say, if you were on 90K per year and haven't saved a bean I am pretty worried for you.

Taking a break in your situation as tired as you are is not an option. Look for work and cut out EVERY thing you can from your budget from mobile phones (or at least go PAYG) to Sky to everything you don't absolutely need.

No way you will survive on a pension if you didn't save earning 90K per year.

I agree that relocating to a cheaper area may help, but you have schools to consider.

xylophone

http://www.hmrc.gov.uk/pensionschemes/annual-allowance/examples.htm
is the lump sum to pension on redundancy relevant to your situation?

redvalley

I am looking for a way to pay less tax on redundancy and have been told by a colleague to ensure i pay as much of my gross redundancy to my pension. Secondly I have also been told to try to get any payment paid after 5th April.