Redundancy, Pension Calculator or Independent Financial Advice?
According to a recent Redundancy Report by the Department of Enterprise, Trade and Investment between March 2015 and March 2016 there has been:
• A 6% increase in the number of confirmed redundancies
• 2,159 confirmed redundancies in March 2016 compared to 2,030 in March 2015
• 212 of these 2,159 were confirmed redundant in March 2016!
It is clear that with a 6% increase in redundancy within Northern Ireland, we are not all fortunate enough to be in employment with a guaranteed income until the most common retirement age, of 65.
Redundancy, is something that most of us don’t see coming, nor are we financially equipped to deal with it’s repercussions.
Employees can receive up to £30,000 as a qualifying redundancy payment, free of tax and National Insurance. This redundancy amount includes any statutory redundancy pay to which you are entitled. If you receive more than £30,000 for redundancy pay, then the extra amounts over this cap are taxable.
It is important to understand what exactly each redundancy payment is for, because certain types of payments included within redundancy pay may be taxable. For instance, holiday pay, bonuses and arrears of pay are all taxable. Another common type of payment is ‘Pay in lieu of redundancy notice’ this is often taxable, but not always.
How can a Financial Advisor help you understand redundancy?
By seeking an independent financial advice, rather than a robotic, impersonal redundancy calculator NI, you can look to redirect certain payments into tax–efficient products.
Pensions are but one example of this and will depend on the rules set by the Inland Revenue and state pension which are far from simple. The key thing is to have your individual circumstances assessed by a personable and trusted pension calculator or redundancy calculator NI so that the best advice suitable to your needs can be given.
Pension Credit and Future Income is the Focus
Deciding what is your target redundancy pay or required income for the future is the essential first step. When assessing your options with regards to redundancy payment and your need for future income, your pension credit benefits should be a key area of focus. Combined with any lump sum payments that are invested to generate income, you need to ask will your pension credit income meet your target income?
You must be careful as not all financial advice is the same. Many, if not most, advisers are “restricted” in what they can advise on or whom they can recommend.
Financial Foresight have always been and continue to be Independent Financial Advisers (IFA’s). We are Northern Ireland based, locally owned and have been providing investments and redundancy advice since the 1980s.
To arrange a free initial chat contact Financial Foresight on 028 9332 2822!
