Help! Redundancy Payments and Salary Sacrifice

[SJ]

Hi - I do hope that someone can help me - as I've had differing advice from my employer - which is confusing me - and I dont know where to go for advice!

I'm being made redundant in a couple of weeks - and have til the end of this week to make a decision re whether to put some of my redundancy pay into my AVC (and how much).

My question is what is the maximum that I can put into the AVC?

My employers website suggests that 100% of salary can be 'sacrificed' - but I think that is referring to our standard pension/avc payments that are paid this way.

However when I talk to my employers 'Pension Hotline' - they say that the limit is 47% of my salary todate (in this tax year).

Which is correct? And is it 47% of the 'nominal' salary ie before sacrifice, and does it include the £30k tax free element?

Does it make a difference what I earn in the rest of the year? ie does it make a difference whether I dont work again this tax year - or whether I start straight away with another job?

As my pension is contributory - and I already put £300 pm into an AVC I'm assuming that this already comes out of the 47%?

Apologies - I am very confused - and I'm hoping that the answer is not 'it depends on your company scheme'!

As part of my redundancy package they offered 'financial advice' - but unfortunately that just appears to involve selling me places to put my redundancy money rather than answering questions like this....

Thanks in anticipation!

[graham174]

Hi

I'd be perfectly happy to answer your questions, but, once you put your redundancy pay into a penson
it is no good asking for it back. My point is, where do you go from here ? About 600,00o people will be
starting their own businesses in the next year. Have you thought about that ? How about we build you
a business together ?

Regards,

Graham Funnell (Tax advisor)
01209 821983

[SJ]

Hi Graham

Yes I have thought about that - I am going to start contracting straight away so do not think that I have a need for the redundancy money - especially if it pushes me into £150k in this tax year.

SJ