Early retirement

[allan.f]

I have previously posted asking what happens to redundancy money whilst in an IVA and understand that it is to be used to "pay oneself" until back in employment,ok,but now I have been offered early retirement with a lump sum option and a pension on top of any redundancy package( I am 57) what happens to the pension money should I choose to take it? Also I am looking to take a driving instructors course and hopefully make this my future employment.The course is in the region of £3,500 would I be able to pay this out of the money I receive? There may also be set up costs ie.franchise or car purchase.
I haven't done all the sums yet but I would like to know where I stand.I would hate to get the money and have to pay it all in and be left with a reduced pension and no job.

[MelanieGiles]

Hi again allan

I can't remember whether you are in an IVA or not - please confirm.

The offer you are being made relates largely to your occupational pension which is generally exempt from all forms of insolvency proceedings - but if you take a tax-free lump sum there is some argument that the pension then becomes cash which would be caught under windfall proposals. You really need to discuss this with your IP to see what slant they have on the suggestion. How much money do you anticipate receiving?

Your annuity payments would most definately be treated as additional income, and therefore your monthly repayments would be increased accordingly.

With regard to your driving instructor course, if I were your IP I would definately allow you to use some of the money to fund the costs, together with any business start up costs you may incur.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[allan.f]

Hi Melanie,
yes I am in an IVA,started 04/01/07 the amount of lump sum available is £16k.Would I be better off leaving it and keep my pension untouched til at least the IVA is finished? I will still have my redundancy.
Regards
Allan

[MelanieGiles]

Hi allan

You need to take detailed advice from a pensions professional with regard to the advantages and disadvantages of not drawing your pension until the IVA is finished.

This is really important, given that once you have decided what to do you cannot change your mind, and this money is to be used long into the future to keep you and your family when you are not able to work any longer.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk