Redundancy and Pension

My wife is being made redundant at the end of the month. She's 64 and due to retire next year so not a bad thing. She is getting £35000 pay-off (30,000 tax free). Along with this she will get shares from the company scheme (about £10000) and holiday pay (about £2000). She's due a small pension from 11 years service. I've heard about Redundancy Sacrifice but not checked whether she can do this. 
My question is - is it best to boost her pension? Also could the shares/holiday pay be included to boost the pension? We have some savings and I still work full-time so we do have options. 
She currently works part-time (3 days) so not a high tax payer. 

thanks for any advice. 

Comments

  • Marcon
    Marcon Posts: 14,048 Forumite
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    My wife is being made redundant at the end of the month. She's 64 and due to retire next year so not a bad thing. She is getting £35000 pay-off (30,000 tax free). Along with this she will get shares from the company scheme (about £10000) and holiday pay (about £2000). She's due a small pension from 11 years service. I've heard about Redundancy Sacrifice but not checked whether she can do this. 
    My question is - is it best to boost her pension? Also could the shares/holiday pay be included to boost the pension? We have some savings and I still work full-time so we do have options. 
    She currently works part-time (3 days) so not a high tax payer. 

    thanks for any advice. 
    'Best' depends on what your objectives are - and you've not said what you are trying to achieve ('maximum cash' isn't always the only objective!).
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • p00hsticks
    p00hsticks Posts: 14,360 Forumite
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    Depending on the particulars of the scheme, and whether or not she's already used her ISA allowance this year, it's worth looking into if she can move the shares straight into an ISA to avoid any capital gains. From memory and past  experience, some employee share schemes allow for this, but I think it needs to be done within 90 days and may not apply if the scheme contributions have to be terminated early due to redundancy.....   
  • Mark_d
    Mark_d Posts: 2,392 Forumite
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    I would try to have the taxable amount (i.e. the amount above £30,000) paid directly into the pension.  In terms of income tax, receiving this taxable money now might attract 20% tax on all of it, but paying the amount into pension means you could take a quarter of the amount tax free.
    I think it's likely that holiday pay is treated together with your wife's regular income - so the same pension contribution rate would apply.  However I believe it is worth putting the money into pension unless there's a good reason not to do so.
    I think it is unlikely that the shares can be directly added to pension.  There are options to sell the shares and personally put the money into pension.  Alternatively you can keep the shares and benefit from capital growth and dividends.  But I can't advise on what you should do in respect of the shares.
  • xylophone
    xylophone Posts: 45,578 Forumite
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    https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa

    She should investigate whether ISA option is available

    https://www.justanswer.co.uk/employment-law/nhn8u-made-redundant-employer-offering-share.html

    and whether the holiday pay and redundancy payment over £30,000 can be contributed to pension.
  • thanks for the replies. Part of the redundancy package is that the shares will be sold when she leaves. So she will get about £10,000 from these, not really sure what to do with this money. She is going to look at putting anything from her redundancy payout above the 30,000 into her pension. 
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