If I’m made redundant do I have pay pension contributions based on my redundancy pay?

The tax-free redundancy payment (up to £30,000), ie the lump sum you’d get for being made redundant, isn’t counted as pensionable earnings and therefore isn’t subject to pension deductions. What you receive in your final period of employment which is your normal taxable pay will be subject to the same automatic enrolment deductions.

If you wish to use your redundancy pay to make pension contributions, you can up to your annual allowance (this would be an employee and not an employer contribution). Please note that if you’re under 75, you’re eligible to pay in up to 100% of your UK taxable earnings or up to £3,600 gross, whichever is higher, and receive tax relief on your contributions. However, only the redundancy payment over the tax-exempt threshold of £30,000 will be classed as employment income and therefore count as relevant UK earnings.

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