Would I be stupid to take voluntary redundancy?

sitcom321

notanewuser wrote: »

Don't leave for £30k then!!

why?? what is the reason not to? the penison I would get is not going to be anywhere near 30k so why not take the 29k get another job

notanewuser

sitcom321 wrote: »

why?? what is the reason not to? the penison I would get is not going to be anywhere near 30k so why not take the 29k get another job

Because staying put and contributing to the NHS pension for another 10 years will see you much better off in retirement.

Have you actually researched the job market in your area?

sitcom321

yes i have researched and there are jobs out there, its whether at 55 I would get them, I no ageism is not supposed to exist but I think we all know that it does. that said I initially sent of for two jobs when the consultation period started more in panic i think than anything else and got interviews for both jobs (I withdrew from them both as i think i had been a bit hasty)

Dunroamin

sitcom321 wrote: »

i have only been in the nhs pension for 8 years so i dont think the early retirement would be anywhere near this kind of payout even if i stayed another 2 years or more, I also have never had any other pension before starting work in the nhs

In that case I'd look very carefully at staying with the NHS until pension age, particularly considering the sort of lump sum you'd get then.

Dunroamin

sitcom321 wrote: »

why?? what is the reason not to? the penison I would get is not going to be anywhere near 30k so why not take the 29k get another job

If the NHS pension scheme is based on 80ths of salary you'll receive around £5,000 pa for the rest of your life and a lump sum as well. That's a lot to throw away for £30K now!

noelphobic

VfM4meplse wrote: »

The money may be tempting, but in your position I would personally try to hang on for as long as possible - you would still get the same money if there was a round of compulsory redundancies further down the line, but at 55 a better deal may be on the table for early retirement. Grit your teeth and get on with it for at least another 2 years.
The rtn to work period is 1 month.

If the payout being offered is more than would be offered in the case of compulsory redundancy (where statutory minimum payments could theoretically be paid) then that may not be true.

I've recently decided to take voluntary redundancy myself (not from the NHS) and it has been a difficult decision to make. The payout is very generous though and I have paid in to a final salary pension scheme for over 20 years. I am 53 now and could take my company pension at 55, although I do know that it will be less than I would have got if I continued working for longer and/or claimed my pension later.

I am also looking into the possibility of putting part of my redundancy payment into my pension scheme and thereby reducing my tax liability and getting a better pay out on my pension. I don't know whether this is something the OP has considered, although the tax question wouldn't arise with a redundancy payment less than 30k.

It's unlikely that I will ever get another job that pays as well as my present one, which is part of the reason why it has been so hard to make a decision. In the end I decided that this could be my last opportunity to do something different and I didn't want to work for the organisation I am now with into my 60s.

Good luck with whatever you decide OP.

firesidemaid

As a fellow nhs-er, my thoughts were also concerning your pension. 8 years doesn't sound much, but 18 does!

Work out what amount of pension you would be losing out on if you didn't return to he nhs vs if you stayed.

Also, your employer may offer you redeployment instead of redundancy, which may be less attractive.

Who would do your job if you were made redundant? Is it likely as you are specialised that they would choose not to make your post redundant?

martinbuckley

sitcom321 wrote: »

I have asked for voluntary redundancy figures which is around 28-29k, I am 55 years old now, am on approx 20k pa

You are effectively being offered two years' take-home pay. If you are confident that you can get a job in two years then bite their hands off. If you are confident that you can get a job that may pay £5K less and can use the £30K to supplement your income until you retire, then bite their hands off.

notanewuser

martinbuckley wrote: »

You are effectively being offered two years' take-home pay. If you are confident that you can get a job in two years then bite their hands off. If you are confident that you can get a job that may pay £5K less and can use the £30K to supplement your income until you retire, then bite their hands off.

VERY shortsighted view. Would not take this advice a) at the OP's age or b) in their pension situation.

Sycorax

....just to quickly summarise a few points:

Your redundancy payment will be tax free

You should also receive the equivalent of your notice period (which should be at least 8 weeks with 8 years service) any other payments you're due e.g. 8 weeks pay, accrued holidays (up to the end of your notice period) any other benefits e.g. any allowances.
these payments are all subject to tax and N.I. (unless there is no pay in lieu of notice 'PILON' clause in your contract, in which case these can also be paid tax free).

Your pension will be topped up to the end of your notice period or you could receive the employers contribution element as part of the pay in lieu of notice (you need to check that out, but the emplyers contribution to a public sector pension are significant, so taking another 8 weeks worth of 12% of your salary may be worth doing).

As to your pension, as a public sector worker you're likely to be on a final salary scheme, which is index linked. So even if you go now your pension will continue to grow.

As you've been made redundant you should also be eligible to claim your pension as from 55 with no reduction in payment.

So this is painting a slightly different picture. You could get your redundancy (tax free), your 8 weeks pay and rations and claim your pension. If you're fortunate you could also get another job.

It is a risk, but isn't everything. You could find yourself facing redundancy again in a short time, or you could still be there at 65.