Over 30,000

penpon

Hi all I'm thinking of taking voluntary redundancy from my place of work but didn't realise that anything over £30'000 is taxable, I have a money purchase pension with the same company (standard life) is it worth me putting the excess into the standard life scheme .

Kynthia

It might be worth posting on the pensions board for more specific advice about the pension. However you are correct that paying anything over the £30k into a pension will reduce the amount of tax you pay on that portion.

Things to consider off the top of my head are whether you are happy to lock that money away until you are 55 or older depending on the pension scheme, or will you need it sooner? How much tax are you really saving as you might be able to reclaim some if you earn very little over that tax year? Is that pension scheme the best choice or would a different one, like a SIPP, be better? Just some things to think about.

Dazed_and_confused

Kynthia

However you are correct that paying anything over the £30k into a pension will reduce the amount of tax you pay on that portion.

Are you certain about this? Op has not given any information about their salary so let's say they took redundancy of £50000, £20000 of which is taxable, in the next few months after earning £5000 salary and subsequently earned £15000 in a new job post redundancy.

How would paying anything into a pension reduce the tax payable on the £20000?