Redundancy seems to be common within the workplace these days as companies are constantly looking for ways to maximise efficiencies to remain competitive.
We have years of experience in providing financial advice to employees faced with a redundancy situation. We understand the emotional stress some of you may face as well as the impact placed upon your immediate finances.
That said, we also understand that for some redundancy can open up new opportunities, perhaps the ability to partially or fully retire early or have the chance to pay off some burdensome debt.
Through our established relationships with like-minded support groups, we have developed a specialism for providing advice to people faced with a redundancy situation and our highly experienced consultants are at hand to help you.
Taking withdrawals may erode the capital value of the fund, especially if investment returns are poor and a high level on income is being taken. This could result in a lower income when the annuity is eventually purchased.
Understanding State Benefits
There are of course many different types of State Benefits and your ability to make a claim, should you have need to, will depend upon your personal circumstances.
We can help you understand the range of State Benefits that may be available to you and how you would go about seeking further guidance.
We can help you understand how Jobseekers Allowance works and how the receipt of a redundancy payment and / or early retirement benefits may affect your ability to make a claim.
Redundancy Payments & Tax
Often the first £30,000 of Contractual or Statutory Redundancy Pay is exempt from income tax however amounts above this level are usually added to your income in the tax year of receipt and taxed accordingly.
The amount of tax is usually deducted via the PAYE system often resulting in people over-paying in tax. Any over-payment may be gradually clawed back through your new employment and adjusted tax code or offered as a refund from your tax office. Some may need to pay more tax or be asked to complete a tax return.
Ultimately, you are responsible for your own tax affairs and it is important that you understand the tax implications of receiving a redundancy settlement and how much tax you may be liable to pay.
There are also ways to offset the amount of tax paid and with the new pension freedoms introduced in April 2015 there can be some really attractive tax planning ideas to take advantage of.
Often an employer will offer redundancy on a voluntary basis which can appeal to those at an age where retirement benefits may also be accessible. The combination of having access to pension entitlements along with a redundancy settlement can in many instances offer some life changing opportunities that otherwise may not have been financially viable.
Deciding to access your pension benefits early is a major decision to take and is likely to result in a reduced income being available later in life so it is important to fully understand all of the options available and have a clear picture of how accessing the pension early will impact on long term affordability.
This is vitally important since the decisions made will also affect the amount and way that benefits will be provided to those who out-survive you and in this respect the new pension reforms introduced in April 2015 bring a whole new set of options to consider.
Our consultants are ideally placed to help guide you through your retirement options and creating sound Investment Strategies to manage your wealth to best effect.
Please take time to have a look at our section on Retirement
Tax Planning is not regulated by the Financial Conduct Authority.