VR & pension

[RobertT]

Just to clarify:

The lump sum from your pension is tax free regardless of the amount.

There is no tax on redundancy payments below £30,000, anything higher than that would count as earnings and potentially be taxable, depending on total yearly earnings.
More info: http://www.taxguideforstudents.org.uk/w ... y-payments" onclick="window.open(this.href);return false;

Bare in mind that HMRC often treats a redundancy payment as a normal monthly payment and deducts tax when they shouldn’t. In this case a refund can be applied for or should be automatically paid out at the end of the tax year.
More info: https://www.gov.uk/claim-tax-refund/youve-stopped-work" onclick="window.open(this.href);return false;

In your case fly-catchers, you should not pay any tax on either lump sum(or if as above you can claim it back). Your pension payments will probably be taxed initially but you may be due a refund on that aswell depending on your total yearly income.

[fly-catchers]

Thanks for all the very helpful advice from everyone. I have put my name down for it today. I decided to stay with the EVR and 26 weeks rather than closing the RMPP. Interestingly when I mentioned that option to the DOM she categorically said that was not an option and I was mistaken! Now I have asked for it to progress forward she said she would have to see whether the office could actually afford it and let me know!! So whether I get it or not still seems a bit up in the air. Never trust a DOM or RM!!

Still I look forward to adding "ex Royal Mail" to my profile! And getting my life back (and health & energy!)

[N1-22postman]

Beware that until you get your formal offer of redundancy pack (which gives you 2 weeks to sign) , you cannot "punch the air". My last day of service "LDOS" on the initial redundancy offer was December 2013 but this was ditched (no explanation) and I was in limbo until I got my formal offer pack in February 2014 with a LDOS in April 2014.
When you do sign the formal offer and you know for definite your LDOS, get your manager to calculate your leave due and be sure to book these days off before LDOS or you lose it. This is taken from your formal offer document - " You will be expected to take any accrued leave between now and the last day of service and will not receive any additional compensation in respect of any accrued but unused annual leave entitlement as at that date"
Because of your age (57) and your very large pension lump sum I believe you are doing the right thing and not going for the 104 week Redundancy lump sum.
Do you have to take your AVC worth £10K at the same time as the rest of your pension? You talk of taking the £10K as cash - are you allowed to do this? You are normally allowed to take a 25% pension lump sum tax free and the rest is taxed at your tax rate for that year. You may save tax by cashing in your AVC in the tax year after you finish working when your only income might be your pension.
Hope you get it !

[RobertT]

The usual use of a money purchase AVC is to use it to help fund the tax free lump sum so you don’t have to give up quite as much pension. Under new pension rules that come into force in April 2015, it is possible to just take it as cash but you may lose at least 20% in tax. An alternative is to drawdown the money over a period of time while keeping your total income within the personal tax allowance, which is currently £10,600. Although that would depend on any other income you may have on top of your pension.

More info: http://www.royalmailchat.co.uk/communit ... 27&t=69013" onclick="window.open(this.href);return false;