Redundancy - SCSB query

[Julie225]

Hi,
I am about to be made redundant and am trying to calculate my estimated net redundancy payment. I have 10 yrs service and my company are paying 6 weeks per year. I have looked at the 3 options for calculating tax free element and think that the SCSB option will be best for me. However, I'm a bit unsure about the formula:

(A*B)/15-C

If I am happy to use my tax credits for pension lump sum now (instead of at retirement) do I still need to subtract C to get my redundancy tax free element or is it just (A*B)/15 if I use pension credits now?

Secondly, is there any way to estimate C now? Any idea what discount rate is used to calculate NPV?

Thanks in advance for any Help

 

[Sunny]

You will need to get the NPV of the pension from your pension provider. Just be careful. It's rare that foregoing the tax free limp sum at retirement makes financial sense. Unless you have a huge pension built up, the amount of tax it will cut from your redundancy is small. Don't forget you will be entitled to top slicing relief as well in the next tax year so don't forget to take that into account when looking at the implications.