Pensions & Redundancy
If you are facing redundancy, then you will also be facing a period of uncertainty and stress. Your workplace pension may be the least of your immediate considerations. However, the good news is that it is relatively easy to sort out.
Step One: Check What Type of Pension You Have
There are two main types of workplace pension:
- Defined Benefit, also known as a final salary pension.
- Defined Contribution, which could be in an occupational scheme, group stakeholder scheme or group personal pension.
Check with your employer if you are in any doubt and obtain a statement from your pension provider.
Step Two: Consider Your Pension Options in Redundancy
Your options will vary depending on what type of pension you have. It is likely that you will have the option to keep your pension as it is or transfer it to a new provider. You may have the option to convert your group pension into a personal pension.
You can also use part of your taxable redundancy payment, to make pension contributions. Furthermore, if your employer agrees, you could give up some of your redundancy payment as an employer contribution to your pension. This is known as a ‘redundancy sacrifice’.
Step Three: Get Advice
If you are uncertain, then a financial adviser will be able to guide you. Pensions are complicated, and your existing pension may have benefits that you are unaware of, for example enhanced tax-free cash allowances. There may also be charges for transferring.
At Henson Crisp we have a wealth of experience advising individuals transferring their pensions, often in times of redundancy. Our friendly, empathetic advisers can help take some of the stress out of a difficult period.