Severance Sacrifice into pension

Padiham01

Hi all

I am 57 years old and have just been made redundant. I am fortunate in that the severance payment is generous and will be paid on 6th April 2019 . I do not intend to seek further employment
I am seeking advice on Mitigation of my tax Bill. My severance is £137k. I understand that I can have £30k Tax free, with the remaining £107 k taxed at my marginal rate of 40% which I calculate means i will pay £38321 in tax and NI
I also have an AVC fund of £82k
What is the effect of investing £107,000 into my pension with regards to tax ?

happyandcontented

I think that you can only put a max of 40k per year into a pension so you will need to use unused allowance if you have any from previous years to put all the 107k in. Your pension provider should be able to tell you the max figure available to you.

xylophone

severance payment is generous and will be paid on 6th April 2019 .

Is below relevant?

https://www.pensionsadvisoryservice.org.uk/content/spotlights-files/uploads/Redundancy_June_2018_Final4.pdf

Padiham01

Thank you both. Most useful, if somewhat mind boggling .Looks to me as if the saving might not be that great and a lot of heartache and effort to get anywhere?

atush

There will be a tax saving to do. If you can be bothered esp as you will havde claw back of unused allowances from previous years. Assuming you havent been putting in 40K per year?

If not, there as VCTS and other things to look into to save some tax.