USS and Voluntary Severance package, Tax and buying pension

DrWillCUNow

Hi all,
I'm 58 and taking a University Voluntary Severance package soon of 33k. I know that the first 30k will be tax free and the remainder will be taxed at the usual rates. However, I have an option to put some of the package into my pension. I'm still working part-time elsewhere and for various reasons I'm not taking my USS pension until 60+, so I'm taking 30k now to use as income and then opting to put the remaining 3k into my pension. I'm not totally sure about the tax implications of doing this, but think it is not liable for tax at that point if I do that?

Also, I have options for putting it into the Investment Builder or to buy additional pension and I'm not sure what the pros and cons of each option are. Could anyone explain?

Ta!

MeganByers

-as for where to put it — the Investment Builder gives you a pot you can manage more flexibly, maybe better if you want more control or are okay with investment ups and downs.. Buying additional pension gives you a guaranteed income for life, which is more stable and less risky.. goodluck xx

Asimovs_nightfall

You would have to check with the pensions team at your particular institution, but if you put the £3k into your pension you need to ensure it doesn't take you over the contribution threshold (which it probably won't). Simply add up your contributions to date and you'll see what space you have (e.g. earning to date minus contributions to date).  The £3k will bring you tax relief if it goes into your pension, but you will have to figure out how to make that additional contribution. Again speak with your pensions team. 

On your second point, I was under the impression that it went into your Investment Builder, but again check.