Redundancy & pensions faq's

[SeanMc]

30k Tax Free . Anything above put into AVC tax free.

Yes, you've posted that twice now. But as the max VR pay out is going to be 39 weeks plus £6k, many people won't hit £30k, let alone be over it.

I posted it again because the previous responder obviously didn't read the first one.

[RobertT]

30k Tax Free . Anything above put into AVC tax free.

Yes, you've posted that twice now. But as the max VR pay out is going to be 39 weeks plus £6k, many people won't hit £30k, let alone be over it.

I posted it again because the previous responder obviously didn't read the first one.

That's not how I read what posted wrote, but there you go!

[NorthernBoy]

Out of interest who on here will take redundancy if it’s offered at your office?

There seems to a lot of people in their 50s quitting the workforce at the moment.

I've put my name down and plan to take it if it's offered.

I talk to alot of posties and I reckon loads will put in for it.

Good luck I hope you get it.

[RobertT]

I talk to alot of posties and I reckon loads will put in for it.

Good luck I hope you get it.

Thanks. I hope so too!

Personally I think a lot will be put off by the reduced terms compared to MTSF and a certain amount will have put in for it, but when push comes to shove, won't take it.

There's been lots of talk on these boards about how it'll be decided - seniority, the long term sick, the troublemakers, etc. For me, the fairest way would be seniority and I hope that is the case, as I've been in the job 30 odd years!

There's 3 people above me at my DO and from talking to them, 1 isn't interested, 1 might take it but probably won't, and the other 1 probably will. Which leaves me......

[meweavy]

I've put in for VR and am 51,I've been paying in for 22 years will I still be eligible for my lump sum at 55 if I get made redundant?

[RobertT]

I've put in for VR and am 51,I've been paying in for 22 years will I still be eligible for my lump sum at 55 if I get made redundant?

You will still be able to take your pension from the legal minimum age(currently 55). Being made redundant has no effect on that at all.

*The legal minimum age for accessing any pension is due to increase to 57 in 2028.

[meweavy]

I've put in for VR and am 51,I've been paying in for 22 years will I still be eligible for my lump sum at 55 if I get made redundant?

You will still be able to take your pension from the legal minimum age(currently 55). Being made redundant has no effect on that at all.

*The legal minimum age for accessing any pension is due to increase to 57 in 2028.

Ok thankyou,I'm 55 2027.

[rambo1]

Out of interest who on here will take redundancy if it’s offered at your office?

There seems to a lot of people in their 50s quitting the workforce at the moment.

I'd have the offer signed and given back in 5 mins.

[RobertT]

Out of interest who on here will take redundancy if it’s offered at your office?

There seems to a lot of people in their 50s quitting the workforce at the moment.

This article seems to suggest they'll be plenty who return to work in due course:
https://www.thisismoney.co.uk/money/mar ... -boss.html

[RobertT]

I'd have the offer signed and given back in 5 mins.

Same for me.

Personally I think I've done my time and it's (nearly) time to go and will do next year whether I get VR or not!

[SeanMc]

Good luck Robert. Hope you are successful.

[RobertT]

Good luck Robert. Hope you are successful.

Thanks.

[posted]

Thank, so in theory , if one exits the business and receives £30k by end of March, they could add an AVC max amount that totals their salary for the year taking into account AVCs they’ve already made this tax year.

Come 5th April, they’re not working yet nor drawing any pension so how much can they add as AVC?

[RobertT]

Thank, so in theory , if one exits the business and receives £30k by end of March, they could add an AVC max amount that totals their salary for the year taking into account AVCs they’ve already made this tax year.

Come 5th April, they’re not working yet nor drawing any pension so how much can they add as AVC?

You can only pay in what you earn into your pension/s per year, up to a max of £40k and gain tax relief. So if you earn £25k that's how much you can pay in!
you can pay in more than that if you want to, but you won't get the tax relief, which is the aim attraction of pensions!

If you get VR of £30k or less, that doesn't count towards your earnings as it's all tax free, and you can't pay that into your AVC's. But you can pay at least some of it into a personal pension and get tax relief, as long as your total pension contributions are no more than what you've earned.

So on a wage of £25k, if you've already paid £5k in, you can pay in another £20k of the VR cash. But it has to be into a personal pension!

If you have no income, you can pay a max of £3,600 gross(inc the tax relief) into a pension, which relates to £2,880 net(the amount you pay).

I hope that makes sense. Pensions are never easy!

[posted]

Thank, so in theory , if one exits the business and receives £30k by end of March, they could add an AVC max amount that totals their salary for the year taking into account AVCs they’ve already made this tax year.

Come 5th April, they’re not working yet nor drawing any pension so how much can they add as AVC?

You can only pay in what you earn into your pension/s per year, up to a max of £40k and gain tax relief. So if you earn £25k that's how much you can pay in!
you can pay in more than that if you want to, but you won't get the tax relief, which is the aim attraction of pensions!

If you get VR of £30k or less, that doesn't count towards your earnings as it's all tax free, and you can't pay that into your AVC's. But you can pay at least some of it into a personal pension and get tax relief, as long as your total pension contributions are no more than what you've earned.

So on a wage of £25k, if you've already paid £5k in, you can pay in another £20k of the VR cash. But it has to be into a personal pension!

If you have no income, you can pay a max of £3,600 gross(inc the tax relief) into a pension, which relates to £2,880 net(the amount you pay).

I hope that makes sense. Pensions are never easy!

Ah thank, my apologies I kept throwing the AVC term in there when actually it’s a private/individual pension.
So £2,880 is the amount I was looking for. Until one gets a job/starts earning again when you can start filtering more money into private pension in line with earnings.