Redundancy payments into pension

gadger999

Hiya guys...please advise ...
Currently earn about 35 k per year part time..paying 35 % into my pension through salary sacrifice and employer contributions...
Looks like I'm getting made redundant in may / June and getting 120k...
Question is if I take the 30k tax free..can I put the 90k left into my pension using next years unused allowance and the previous 3 years unused allowance....heard so many different things . I'm sure one of you can help....Thanks in advance

El_Torro

A quick Google search tells me that the £90k redundancy payment (the part that isn't tax free) does count as taxable income, so you can indeed put it in your pension, assuming you have enough carry over to do so (sounds like you do). 

The most tax efficient thing is for your employer to pay the full £90k in to your pension via salary sacrifice. They may or may not agree to do this, it's worth asking.

Kernowshep

My wife did similar (on a smaller amount of redundancy) to make sure she kept below the tax/childcare thresholds.

The wording in the clause of the settlement agreement said something like "the company will pay x into pension and add the NI the company would have paid on that amount" - there was back and forth with HR about it multiple times, I don't think she could sacrifice against the PILON (Payment in lieu of notice amount) but could from the compensation payment. N.B. When she was employed by them the company offered Sal Sac into pension with NI added.