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Pension and Voluntary redundancy

1 reply

Worsethingshappenatsea · 06/07/2024 00:09

I'm nearly 50 and taking VR and my severance is approximately £60k with the first £30k tax free.
I will have earned approx £11k this tax year by the time I leave on 1st August and I start a new job mid August on £30k so this will take me into 40% tax bracket.
My pension forecast says currently stands at £7700pa I can't draw u til im 57

I have the option to put the taxable part of my redundancy pay into my pension but providers can't/won't give me figures how this will impact the amount paid out .
Any advice appreciated whether it's best to put the extra into pension or just take the whole lump sum and pay the tax?
Thanks

OP posts:
Bunsforbreakfast · 06/07/2024 05:17

You'd be better off putting it into your pension as it would be tax free, so it will give your pension a big boost. The drawback is that you can't touch it once it'd in your pension, do you need access to the money?

There are plenty of online pension calculators you can use to see the impact. You'd need to use one to see the impact to your pension pot first, and then plug that amount into a drawdown calculator to see monthly income.

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