Tier 1 Ill Health Retirement

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Hi,

I have been dismissed from my employer under ill health and have been granted tier 1 ill health retirement. I don't know if to take as a yearly amount (which works out just short of my pervious salary) or a lump sum. 

I have a young family and no other assets, so don't know what to do for the best. Any advice appreciated, or even signposting to someone i can speak to.

Thank you

  • Hello @Little Mermaid,

     

    Thanks for getting in touch.

    Although we can’t give advice, we may be able to offer some guidance around things to consider before making a decision.

    When accessing a pension its important to understand what impact this may have on any means tested benefits that you may be entitled to or currently receiving.

    It’s also important to know if there any tax implications by taking a pension as a lump sum and how any income will affect your tax position.

    There may be other things to consider depending on the pension scheme you’ve been granted ill health retirement from, and this is something we’d be able to discuss in more detail over the phone if required.

    If you’re wanting to seek financial advice, I’ve included some information below.

    Finding a Financial Adviser

    Find a Financial Adviser by asking family and friends for a recommendation or by visiting: www.findanadviser.org/find-an-adviser.aspx

    Tell the adviser what’s needed e.g., advice on retirement options due to a cancer diagnosis. The Financial Adviser should arrange a meeting to discuss these needs and do a fact-finding exercise (this is where they ask questions about finances and personal situation). Their next step is to research options and put together their recommendation.
     
    MoneyHelper also have some useful websites and tips for choosing a Financial Advisor. Please access the link below for more information:
     https://www.moneyhelper.org.uk/en/getting-help-and-advice/financial-advisers/choosing-a-financial-adviser
     
    When choosing a financial adviser; always check that they, and the company they work for, are authorised by the Financial Conduct Authority (FCA).
     
    It’s possible to check individuals and companies on the FCA register:
     https://register.fca.org.uk/s/
     
    To speak to the FCA directly, phone 0800 111 6768 from 8am to 6pm, Monday to Friday (except public holidays), and 9am to 1pm Saturdays.

     

    Benefits Check

     

    As part of our Money and Work Team, we have a dedicated group of Welfare Rights Advisers. They can check state benefit entitlements and can help to access other financial support, such as one-off grants. They are also able to give advice on how any lump sums from insurance or pensions may affect means tested benefits.

     

    They will need to know certain information in order for them to do this, for example:

     

    • The date of cancer diagnosis.
    • Details of the cancer diagnosis, and/or other medical conditions and treatments.
    • Full details of any savings or investments and capital for all members of the household.
    • Details of income from earnings and other income, such as maintenance, for all members of the household.
    • Details of benefits being paid, recently applied for and/or refused, for all members of the household. If in receipt of Universal Credit, please have a breakdown to hand explaining how this has been calculated.
    • Details of mortgage/rent payments.
    • Confirmation of how much council tax is payable. Please have a copy of the bill to hand as they will need to know the local authority and the council tax band.
    • A note of fuel costs and who the household energy provider is.
    • Details of all people living in the household including their ages and date of birth.

     

    They are available Monday – Friday 8am – 8pm and Saturday & Sunday 9am – 5pm.

     

    If you’d like to discuss this further our free phone number is 0808 808 00 00. To reach the Financial Guidance team just select options 1 then 2 then 1 again. Our team are available Monday to Friday 8am – 6pm.

     

     

     

    Kind regards.

     

     

    Will Quinn

    Financial Guide