Relocation package - monthly or yearly payment?

Zana2018

Hi MSE people! I'd love your advice on a situation I'm about to get into. Apologies if this isn't the right thread but I thought this was most relevant.

I'm due to receive a relocation package. It'll be provided for the next 4 years and I have the option of having them as either monthly payments with my normal salary or as an annual lump sum (probably paid every October).

Payments are calculated NET such that the amount I receive will take into account national insurance and income tax but not my student loan repayments.

I'm trying to decide which option is best. I won't go below the 40% tax bracket, even if I take 3 months off unpaid and having a lump sum means I can invest it straight away. Are there any reasons why I should consider getting a monthly payment instead?

Thank you!

IanSt

Is there any clawback if you decide to leave or similar?

Could you go into the next tax band up for the month that you get the annual lump sum, and then have to wait for the excess taken tax to come back?

These could impact your decision, though provided that you will get the lump sums in advance and it does not affect your tax position then the lump sum approach certainly seems suitable.

Zana2018

Thanks for the response. Yes, there is a clawback, but I'm unlikely to leave my company in the next 4 years so it should not matter.

To answer your other question, taking the lump sum won't affect my tax bracket. And seeing as there does not seem to be any other negative reasons, then the lump sum seems to be the best option. Though now trying to find somewhere to invest it a totally different minefield.