Redundancy timing and end of current Tax year implications.

DaveO55

Hi 

I have an imminent redundancy looming in March 2026 and iam worried about tax implication's due the timing of this. I will have earned around 50K and overpaid my works pension to keep in the lower tax bracket but with an 80K redundancy due on top of this in March iam looking at how best to keep tax down after my 30K tax free. Would putting as much as possible into salary sacrifice in this tax year or would it be beneficial to defer my redundancy (which is possible) to after April 11th 2026 and be in the new tax year ?  
I am hoping for more accurate figures asap if i need to re ask this question later. Just looking for initial thoughts.
P.s not looking to hard for a Job in 2026 as iam 64 in July of that year with pensions kicking in or it will be part time.

thanks for any help in advance.

Dave 

Albermarle

Salary sacrificing more into your pension makes sense, but be aware that you can not sacrifice down below the minimum wage. I think that employers tend to look at this on a monthly rather than an annual basis, but you would need to check with your payroll dept. how they would look at it in both scenarios ( payment in March or April).

monkey-fingers

DaveO55 said:

Hi 

I have an imminent redundancy looming in March 2026 and iam worried about tax implication's due the timing of this. I will have earned around 50K and overpaid my works pension to keep in the lower tax bracket but with an 80K redundancy due on top of this in March iam looking at how best to keep tax down after my 30K tax free. Would putting as much as possible into salary sacrifice in this tax year or would it be beneficial to defer my redundancy (which is possible) to after April 11th 2026 and be in the new tax year ?  
I am hoping for more accurate figures asap if i need to re ask this question later. Just looking for initial thoughts.
P.s not looking to hard for a Job in 2026 as iam 64 in July of that year with pensions kicking in or it will be part time.

thanks for any help in advance.

Dave 

I got a similar payoff earlier in the year.

I took the £30k tax free. Dumped the rest into my pension. I'm 55 next year, so I can take it out again if I want, tax free.

monkey-fingers

Albermarle said:

Salary sacrificing more into your pension makes sense, but be aware that you can not sacrifice down below the minimum wage. I think that employers tend to look at this on a monthly rather than an annual basis, but you would need to check with your payroll dept. how they would look at it in both scenarios ( payment in March or April).

Minimum wage is based on time spent working.
Redundancy has absolutely nothing to do with minimum wage. I dumped £54k into my pension.

Albermarle

monkey-fingers said:

Albermarle said:

Salary sacrificing more into your pension makes sense, but be aware that you can not sacrifice down below the minimum wage. I think that employers tend to look at this on a monthly rather than an annual basis, but you would need to check with your payroll dept. how they would look at it in both scenarios ( payment in March or April).

Minimum wage is based on time spent working.
Redundancy has absolutely nothing to do with minimum wage. I dumped £54k into my pension.

The OP has probably confused the situation ( me ) by saying - Would putting as much as possible into salary sacrifice in this tax year 
So I read this as him upping his contributions before he got made redundant, in which case if they are made by salary sacrifice, the minimum wage issue could rear its head.

However if it was after he was redundant, then he could not salary sacrifice any contribution anyway, and it would just be a straight lump sum, like with you .