What to do with redundancy payment?

silverwhistle

When I was 'made' redundant from an IT post at the age of 45 it was after I asked "what was the situation about leaving packages" given that many people had already gone. I'd left the building within the week, to great relief (probably all round!). My reduced pension kicked in at 50, but I also had the benefit of inflation increases and so was pleasantly suprised when I first started receiving it. I never did a full time permanent job again but got by on teaching and other miscellaneous work.

In your circumstances you may have the opportunity to get a pension immediately and you'd have the flexibility afforded by a lump sum> Wait and see what _they_ offer. :-)

saver861

Clipperdedoodah wrote: »

I think I can do this but at the pension trustees discretion. I think it depends on the wording of my redundancy notice. If it says I have been 'asked to retire' rather than having been made redundant.

hmm ....its a bit of a pity you have not got more time to establish your pension entitlements prior to volunteering for redundancy. That can make a big difference to the decision.

If you can get your pension unreduced then that would be very beneficial, given that you are over 55. However, it is redundancy .... whether they ask you to retire or put it any other way. I don't see how it can be anything else if you are asked to leave.

I'm guessing you won't have to make a decision tomorrow and those things can actually drag on for some time. I'd be inclined to go in tomorrow and do more listening than talking. Gather the facts of what they are asking/offering. It may not be what you think it is or it may not be your name on the ticket.

After the meeting you will be in a better position to assess your status and what to do short term and long term.

xylophone

I don't know what a DC scheme is.

DC = Defined Contribution - a personal pension, SIPP etc.

Marktheshark

I would sell the house the Ex has a stake in and put what you have left with the redundancy in to a new property without a mortgage.

I can not see any investment beating that, remember interest rates are well overdue a rise.

PaulCooper

I don't think it's been said in any of the other posts, but the first £30 odd K of a redundancy payment is not taxable.
Take the money if offered, put some of it into a pension fund, as others have suggested (only enough to prevent you paying 40% tax), then take it out in a tax efficient way when you're paying a lesser rate of tax
Best of luck
Paul

kidmugsy

Clipperdedoodah wrote: »

Do I need a financial advisor to do this?

No need. Visit the website of Hargreaves Lansdown and see what they have to say about a SIPP. Then, when you've got the drift of it, compare their charges and service with a couple of other providers, as might be AJ Bell, and Cavendish Online.

We use HL and think their service very good. If you simply leave the money in cash, rather than investing it, you'll probably find their charges pretty good too.

Clipperdedoodah

A SIPP sounds like a great idea but if I move money into one, I won't be able to clear my mortgage and I can't afford my mortgage without a job.

Mortgage payment is £447.00 a month.

Or am I missing something?

bigfreddiel

This discussion seems to be based on not being able to get a job because your are, too old (you're not), and being too specialised (not important, you have it skills).

I would look for an IT post, part time and then decide what to do. You're probably on a tight timescale which adds pressure.

I've worked in IT since 1975, in that time I was made redundant twice, worked freelance, got my last job at 47 yrs old, retired in 2013, got bored and at age 62 got a part time it support job, paying me more than when I was working full time! Roll on a few more months and I'm 65, no NI to pay and another small pay rise as a result.

Now I never expected to be working at 65, much less than I expected to be employable, so check that route out first.

One more point, where I live in Cornwall, IT jobs are a bit thin on the ground, well paying ones that is, so it can be done.

Good luck fj

Clipperdedoodah

Thank you all. I think the fact that I've been with the same employer for so long is also a factor in my nervousness. Part of me is terrified and another part is pleased that I might finally be able to give up my two hour each way commute.

xylophone

Check whether redundancy permits immediate pension without actuarial reduction.

You could take the redundancy money after contribution to DB pension scheme, use it to pay your mortgage etc until the house sells, look for job in Reading, buy out your partner's ex so as to obtain your own stake in his house, and use some of the balance of your house sale cash to make the necessary improvements to your now joint home (owned as TIC in the agreed proportions so that you can will your share to your son).

Your new employer might have a pension scheme to which you could contribute - you could also consider opening your own SIPP.