Redundancy

If you are made redundant there are different options depending on how old you are.

What's the process?
1 You and HR discuss your options and figures
2 HR gives you an Expression of Wish form in case you want to divert any of your redundancy payment (in excess of £30,000 only and up to certain limits) to your pension
3 Return this form before your leaving date if applicable

Under 50?

4HR will notify you that you are leaving the business in either your month of leaving or the following month

5On leaving the Scheme you become a deferred member
6Once UK Pensions Operations receives confirmation the team will write to you with your deferred benefits

50 or over?

4UK Pensions Operations gives you a retirement quote and necessary forms

5Complete and return your forms with a copy of your birth certificate plus marriage certificate or decree of divorce if applicable
6We pay your pension on the 15th of the month
7Lump sum? We pay this into your bank account on the first Friday after your retire date

You might be able to take your pension earlier, as follows:

Age at date of redundancy Your pension may be payable from:
50 or over Immediately, without a reduction
45-49 From age 50 without a reduction
40-44 From 50 – reduced for early payment
Under 40 From 60; or from 55 with a reduction for early payment

The younger you are, the greater the reduction will be.

You can also choose to transfer your benefits to another registered pension scheme.

Q&A

If I’m made redundant before age 55 and start to take my pension, can I be re-employed by the Company or a connected employer at a later date?

You can, but you may have to pay a tax charge to HMRC if you don’t meet one of these conditions:

  • There has been at least a six-month break in employment
  • There has been at least a one-month break and the new employment is ‘materially different’ from before

If neither of these conditions are met, any pension payments you’ve received will be treated by HMRC as unauthorised and they usually charge you at least 40% of the value of those payments and any lump sum you received.

Can the Company increase my pension?

If your redundancy pay is more than £30,000, you could give up some, or all, of it in exchange for additional pension. You must ask to do this before you leave employment and before entitlement to redundancy pay has been agreed. Before you do so, make sure you’re not going over the pension allowances.

If you receive pay in lieu of notice, or other compensation, this can’t be exchanged for additional pension and doesn’t count towards the £30,000 limit.

If you need advice, you should contact an Independent Financial Adviser.