SCSB Option

[rust40]

What are the pros/cons of waiving tax free lump on retirement and maximising redundancy payout. The scheme is DC.

 

[monagt]

when i asked the question - the answer was "take the cash" so I did.
In conversations with fin ppl they all seem to say "take the cash" - you can reinvest it.
Leave it and you will pay tax on it.

But best to ask an financial advisor. (not an accountant as they are all short sighted morons IMHO)

Please post answer if you do)

 

[Conan]

It really all depends on whether you want a higher tax free lump sum now (the SCSB number) and no tax free lump sum when you retire or a lower tax free lump sum now and retain your pension tax free lump sum for when you retire.

It is probably worth bearing in mind that there is speculation about that the Min for Finance will change the tax free element of pension benefits in the next Budget, either by imposing a cap or by taxing the amount at say 15%.

If you are being made redundant now, the risk is that if you opt to retain the right to a tax free lump sum from the Pension (and take a smaller tax free redundancy benefit now) that by the time you actually retire, the pension tax free lump sum might not be fully tax free (if you follow me)

A bird in the hand etc.....