Pension

An employee who is made redundant can transfer their pension and can use any redundancy payment to make additional pension contributions. Advice should be sought from the Pensions Advisory Service or a union pensions expert.

Employees can keep their pension benefits where they are, and even continue contributing to the workplace scheme, or transfer them to a new pension scheme.

If the employer agrees, an employee can give up some of their redundancy payment as an employer contribution to their pension. This is known as a “redundancy sacrifice”.

Any additional payments above the annual allowance are subject to tax.