Possible Redundancy

Theta101

I've been put on "consultation" and may be made redundant soon.

My question is could I withdraw money from my pension pots while out of work, 4 pots in total with value of £180K.

Then get a job and continue to contribute into a pension up to £40K a year?

I am 60 years old and would receive no redundancy pay.

Muscle750

How old are you? And how much would you get redundancy wise to tie you over before having to dip into any Pension

Theta101

Muscle
I am 60 years old and would receive no redundancy pay.
(I just edited first post)

GunJack

Theta101 wrote: »

Muscle
I am 60 years old and would receive no redundancy pay.
(I just edited first post)

sounds a bit off, have you seen your union??

jennyjj

At 55+, you should be able to draw on most types of pension, subject to their rules. May well be actuarily reduced if DB and taken early, but that's not a bad thing.
And yes, you can start and pay into another pension while doing so. Recycling rules won't apply if your contributions are then less than your new salary.

jennyjj

GunJack wrote: »

sounds a bit off, have you seen your union??

Yes, Sounds bang out of order. You should expect to get at least statutory minimum compensation unless you are a contractor.

kidmugsy

Theta101 wrote: »

My question is could I withdraw money from my pension pots while out of work, 4 pots in total with value of £180K.

Then get a job and continue to contribute into a pension up to £40K a year?

That would work as long as you restrict yourself to taking the 25% tax-free lump sum from each pension. If you drawdown anything beyond that then your contributions will be limited to £4k p.a.


Question to other readers: in that case could one also exploit unused annual allowance from the three preceding years?

bigadaj

Well if employment is less than two years there would be no statutory redundancy.

As you are over 55 then you can draw pension, 25% is tax free and the rest subject to tax at normal rates including other income in that tax year from employment, savings, dividends, rent etc

If you only take the tax free sum then you can continue to contribute to pensions in future, if you start to take any of the taxed remainder then your ability to contribute in future is radically reduced.

The tax free lump sum applies to each pot independently, so you could draw from one and leave the others untouched.

The above assumes these are not final salary or similar db schemes.

Theta101

As I understand it I'm not entitled to redundancy pay as I've only been in the job for 8 months.

The company have over spent on a IT project, £40M is the rumour, I'm not involved with. So now they are cutting costs and unrelated jobs.

Prior to this permanent job I was an IT contractor, so if I am made redundant I will probably go back to that.