Tax and Redundancy - advice please

totalguitar

I'm considering taking VR from the company i've worked at for 33 years. This is due to TUPE to a new company. I'm 52.

I expect my offer to be :-

1. Redundancy of £43k
2. PILON of £15k
3. Payment in lieu of pension of £2.5k

Total should be circa £60k.

I have 2 works pensions, one is frozen from a previous company takeover and the 2nd is active.

I think everyone would like to save paying tax so what's my best plan to maximise the amount of cash in hand v what to put into my pension.

Secondly if I end up putting £30k into my pension, I presume I can't just take it out at 55/60/65 ?

Any help or advice greatly received.

Dazed_and_confused

If you mean a sipp or personal pension then they only "save paying tax" if you are a 40% taxpayer so without knowing your salary to when you leave the company, expected salary from any new job, any other taxable income such as employer benefits or savings interest and how much of the redundancy payments are going to be taxable it's impossible to say.

If you mean paying more into your existing company pension then if the payment is made pre tax then you get the maximum possible tax relief automatically irrespective of how much you are earning.

Cook_County

Dazed_and_confused wrote: »

If you mean a sipp or personal pension then they only "save paying tax" if you are a 40% taxpayer so without knowing your salary to when you leave the company, expected salary from any new job, any other taxable income such as employer benefits or savings interest and how much of the redundancy payments are going to be taxable it's impossible to say.

If you mean paying more into your existing company pension then if the payment is made pre tax then you get the maximum possible tax relief automatically irrespective of how much you are earning.

But if you can sacrifice and save the employer some NIC you can try & negotiate splitting the saving with the employer.

totalguitar

I have a little more information to give about this situation now that i've received a formal quote.

I cannot pay anything above the £30k into a pension plan that i'm currently in as it will cease one the day I would be made redundant.

I am a 20% rate tax payer.

I'd really like an idea of what tax I can expect to be deducted. Obviously it's early in the tax year so I havent used my allowance up, does this matter ?

In the short term I will claim JSA which I believe is taxable.

Can anyone help ? Happy to chat via message or email.

Thanks in advance.

xylophone

http://www.litrg.org.uk/tax-guides/employed/what-tax-do-i-pay-redundancy-payments