Leave the Rat Race!

jon3001

If you want to derive a long-term income from your capital then you should look at investments rather than savings. Many people are now finding out how flawed usings savings is now that real returns aren't being as masked by nominal returns.

downshifter98

'You would need to have the entire amount in an ISA to avoid income tax on the savings so I can see how NI might be reduced but otherwise its the same tax for the same income I'd think'

yup - a fair bit in ISA's (shares plus cash) plus, until recently, ex-mortgage endowments (now thankfully matured) - part-time work uses up most of our tax-allowance but leaves a little plus don't forget that having such a 'low' nominal income we also qualify for 'child tax credits' (almost finished) plus help with off-spring's University costs (I know I will probably get slaughtered for this but thats the 'system'; its screwed me in other ways....and no doubt will again).

downshifter

andyjwill

Thanks for your comments Downshifter. I was concerned about coming acroos smug..but like you am fed up with always getting screwed over on terms of tax..paying for institutions and individuals who have borrowed way beyond their means.

I wil be away from my family for the next 3 months most of the time and this is not what I want. You work your butt off..get a bonus..and half of it just disappears to pay for who knows what!

The gamble of putting money into investements rather than cash fills me with dread as I ave ben burnt too many times..although I accept the returns are potentially better. My plan is to use cash savings to fund my plans and retain money various investments to try to fund growth.

Berty

You're not smug but just have a different outlook on life in general.
There's nothing wrong with that and as long as your happy thats all that counts.
You only live once and so its best to make the most of it while you can because you never know whats round the corner.

parcival

You sound like me. I retired at 49 and my wife is just about to. We have a reasonable spread of investments and cash which will see us through until we are 65. Then we will draw our various company and state pension which should give us an income of about 30k before tax.

We have not contributed to a company pension for the past 10 years but have instead managed to put away about 140k which we will only start drawing from 65 onwards.

It does mean that we don't have as much money as if we were working BUT we have enough, have little stress and have the added benefit of a nice tax allowance every year that means that all savings interest can be paid gross.

Remember you only live once!

When you want a part time job I recommend becoming a postie. It has very little stress, is great for the waistline and the pay is not bad for what it is. Look at royalmail.com for jobs - they have a high turnover and often recruit.

downshifter98

Phew - seems like I got away with the tax credit comment - must say I agree with the general sentiment here - we have kept our spending under control and have happily given up or gone without many of the luxuries that all about us seem to expect (many are in for a shock now) - our personal inflation rate has been negative for some time (this is, btw, just the same as increasing your income - most seem to forget this) but its all worth it to have escaped the daily grind. After losing 2 close family members in the past 18 months (aged 34 and 61) and witnessing the economic mess thats all about us, worrying about our personal financial viability in 10 or 20 years time just seems a waste of time - chill out and live for now is the plan (but hopefully still within our means....ish).

Downshifter

dobefan

Great thread ... gives me hope, would love more info on how the step is taken.

Cheers

EalingSaver

This really is a great thread. Was discussing similar with my brother the other day. As he pointed out, he's 3 years away from being 50, and I am 6 years away from being the same.

I've never really considered this in complete seriousness. The amount of capital you need to have a comfortable income is pretty high, and even more so for the next couple of years. But supplemented by part time job....

Unfortunately my pension pot is very small. Have a defined benefits pension from past job, but that is only worth about £11k pa at todays rates. At least its defined benefits so as long as the company remains in business it should be uplifted each year. Far too little in personal pension plan. But I do have about £330k in 'cash' assets, plus mortgage paid off. Only have a small place mind you, but putting mine and my fiances together will give us an adequate place (if we can ever sell in this market).

EalingSaver

downshifter98 wrote: »

Phew - seems like I got away with the tax credit comment

Yes, but it sounds like you've contributed your worth in taxes in the past, and that is the system. Far better than a certain type of people who spend their entire life never working and living off benefits, and expecting to have the right to have us fund their lager swilling chain smoking sprog producing lifestyles. [And I'm not referring to those who find themselves out of work and genuinely want to take personal responsibilty for themselves]

When I think how much I've paid in taxes over the last few years and what a large proportion of it gets spend on I want to weep.

andyjwill

Thanks..for all your comments. It really is a massive step but you only live once.

It would be great to hear from others who have done it.

The worst case seems to me that it turns out not to be as stress free as I planned or that money starts running out. I guess in 5 years the economy may be a little better and I should be able to get a full time job again.

As for pensions what's the point of them. Save regularly for number of years, pot keeps going down..Wish I'd bought another house many years ago,so despite house price reductions I'd have some control over what to do with my money.