Becky O’Connor, Director of Public Affairs at PensionBee, comments on the benefits of investing a redundancy payment into a pension.

Analysis by a leading online pension provider, PensionBee, has found that adding a redundancy payment to a pension can result in a gain of almost 50% on the initial contribution for a typical worker. 

Its analysis shows that a £10,000 redundancy payment to a pension at the age of 50, could increase the average pot by £14,669 by age 67, to £257,894. If someone adds £20,000 at age 50, by 67 their pension pot would be worth £272,562 - £29,337 more.

Becky O’Connor, Director of Public Affairs at PensionBee, commented:

While you might need to use redundancy money to tide you over until you find more work, or to retirement, depending on your age, if you’re lucky enough to get another job quite quickly, this cash is tantamount to a windfall. 

One of the most tax-efficient and generally financially beneficial things you can do with it is add it to your pension. If you are approaching 55, the age at which you can first access your pension, this can make even more sense, as you’re very close to being able to use that money again, but with the benefit of tax relief and hopefully some investment growth on top, too.

Full release: How to use a redundancy payment to boost a pension

✉️ Laura Dunn-Sims, PensionBee, 020 3859 5788 / press@pensionbee.com