Redundancy payment - what's best option for me?

WHIP IT!

Hi, I'm about to come into a few quid from a redundancy payment.

I'm in my pensionable (Direct Contribution scheme or something. We put in X amount and company matches it) job less than two years. This, apparently means that I can't claim the company's contribution, although that's not the issue really, it's a small amount as I'm not there long...

If I was to 'cash-in' the whole lump sum, I'd lose alot in tax, 43% or something. Obviously I would like to minimise that in any way possible. Thing is, all this stuff goes right over my head...

Apparently, I can take the tax-free amount as a lump sum and put the rest in the same pension fund...

I think the pension fund is invested on our behalf in some way... I'm not really sure...

What is the best thing to do? It's supposedly a good pension, would I be mad to give it up? It seems the best of both worlds that way - a nice few quid now, and a nice few quid put away for a rainy day...

I would like to pay the least amount of tax possible.

sofireland

I'd recommend you sit down with someone, and have a chat with them because everyones circumstances are different

Its hard to say what to do based on your post

Mr. Pseudonym

sofireland wrote:

I'd recommend you sit down with someone, and have a chat with them because everyones circumstances are different

As sofireland said it would be best to talk to someone with experience in this matter, like say the HR manager in the company.

Every pension is structured differently but in broad terms your options will be:
(a) take out your contributions (as you have been there less than 2 years), however you will be subject to tax @ 41% and the PRSI levy @ 2% or
(b) You maybe able to transfer the full value of your pension (subject to the t&cs of your existing scheme) to a new pension with your new employer or if you start a PRSA.

But get some proper advice!

BuffyBot

Thirded - internet forums are not a suitable alternative for professional advice.