Redundancy impacting pension tax free lump ?

D

Deauville

Registered User
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Hi All,

Can anyone shed some light on the following.

By using Tax Free Statutory Redundancy and SCSB 1 (not signing a waiver to forfeit pension tax free lump sum) would my max limit of 200k pension TFLS be reduced by the tax free element of my Statutory redundancy and or my ex gratia payment ?

I've been searching the web without avail.
Many thanks.
 
So long as you don't sign the waiver, then no. the 200k is your lifetime limit and is not being used. Your Future pension value will be caluclated to present day value and discounted in the SCSB tax free calc.

Do your company not provide a summary of the calculation/payout from various options?
 
Last edited:
50andOut said:
So long as you don't sign the waiver, then no. the 200k is your lifetime limit and is not being used. Your Future pension value will be caluclated to present day value and discounted in the SCBC tax free calc.

Do your company not provide a summary of the calculation/payout from various options?
Click to expand...

Thanks for that. You're a diamond.

So if waiver not signed, the statutory, basic, increased or SCSB will not reduce max 200k limit on pension TFLS.

What had thrown me was the 200k being max lifetime limit and wasn't sure if that applied to the aggregate of the termination and later pension (if waiver not signed)
I'm ahead of the curve and simply weighing up the options in advance.
My employer will provide consultation and advice and the time (if it materialises).
Many thanks.
 
I hear you, I am ahead of the curve too, I haven't been offered redundancy but I am hopeful :cool:

Here is a pretty clear summary:

[broken link removed]
 
I know how you feel. This is a really interesting subject and that link really is great.

Many thanks for your help.
 
Great link. Further tip if relevant -
The SCSB is calculated on your USC'able income, so if you have time (& funds) between now and your last (redundancy) payroll, you can increase (maximise) any pension contribution/AVC without affecting the SCSB calculation for the ex-gratia. If you wait to contribute until AFTER your redundancy date (before you start a new job), it is deemed as coming from tax-free income and therefore no tax relief can be received.
 
Excellent summary. Very comprehensive and everything set out very clearly.
 
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