Implications of giving up work?

welshmoneylover

Hi

I have received a large inheritance, over £200k and I hate my job so I would like to quit and live off it until I get a new job, less demanding!

I have no debts, own my house outright so no large rent or mortgage expenses just the usual utilities, council tax and I run a car, just celebrated my 51st birthday.
I have MH issues and I just cannot tolerate the stress of working
My pension pot is a bit crap due to have a low paid job in retail so can't rely on it entirely in my later years. Will it affect my state pension if I give up my job? I can live quite frugal and I wish to become more minimalist.

I only go as I enjoy the social side of work but I desperately need a better work/life balance.

TomSurrey

You probably won't be able to get a state pension unless you accrue NI contributions some how, worth getting a national insurance statement to check how many qualifying years you have.

If your total liquid assets are £200k then based on the 4% rule that will give you an £8k income forever if you invest it.

In general a pop of £200k wouldn't be considered enough to live off forever.

My advise, get a part time or less stressful job, earn some money, get NI contributions... but invest your inheritance. If you continue to work part or full time you really should also think about a private pension. You can make really big tax savings doing this!

p00hsticks

You can get a state pension forecast here to see how it currently stands and how further NI years would improve it.

https://www.gov.uk/check-state-pension

I don'y want to sound negative, but at 51 I'd be wary of just quitting work for a while and assuming you can just pick up easy / less stressful work that still pays the bills at a later date.

I second TomSurreys suggestion about perhaps looking for a part time or less stressful job

xylophone

You can check your pension here

https://www.gov.uk/check-state-pension

https://www.gov.uk/new-state-pension/how-its-calculated

If you need to make voluntary contributions to reach a full NSP you can do so.

Do you have any other pension provision other than your current occupational pension?

What type of pension is your current occupational pension?

If you give up work and have no relevant earnings you can still contribute up to £2880 to a pension and receive tax relief of £720.

missile

It is easier to get a job when you are in employment.
Keep your "crap" job until you find something you will enjoy.

Audaxer

TomSurrey wrote: »

If your total liquid assets are £200k then based on the 4% rule that will give you an £8k income forever if you invest it.

I would say while that is possible, it is by no means certain.

Glen_Clark

Audaxer wrote: »

I would say while that is possible, it is by no means certain.

Have to agree with this.
Past performance is no giude to the future and has been derived from rising asset prices which now stand at record highs.
Someone in the OP's situation needs to be particularly wary of the risks in investments that might give above inflation returns. Expecting a real return on safe investments is probably as optimistic as expecting to quit work then find a better job when you want it.

veryintrigued

Wish you all the luck in the world here.

Having left a reasonably well paid career I hated in my early 40s I subsequently (whilst working my notice) found a PT minimum wage job - the best and most rewarding job I had.

Kept my mind and social skills active and also meant I didn't dip into savings.

Felt tremendously lucky that for the minimum wage I was on versus the new 'job' it actually felt as if I was been over paid.

Good luck - you live but once and a happy daily life is worth tens of thousands salary IMO.

Glen_Clark

veryintrigued wrote: »

Wish you all the luck in the world here.

Having left a reasonably well paid career I hated in my early 40s I subsequently (whilst working my notice) found a PT minimum wage job - the best and most rewarding job I had.

Kept my mind and social skills active and also meant I didn't dip into savings.

Felt tremendously lucky that for the minimum wage I was on versus the new 'job' it actually felt as if I was been over paid.

Good luck - you live but once and a happy daily life is worth tens if thousands salary IMO.

Glad it worked out for you and hope it does for the OP too.:)
But he is effectively asking us to predict the future, which is notoriously difficult.

Jeems

I was in a similar position you to op, albeit I sold my business and made a small 6 figure sum out of it. I set up a ltd to do part time consultancy work, I pay myself a small amount monthly so I accrue NI contributions.

The world is literally your oyster. You dont need to follow the social norms and work 9-5 your entire life. Find your passion and build a business around it. But separate your home life from work life, eg take a laptop to a coffee shop to work. Self discipline is key or before you know it, it's 1pm in the afternoon, you're still in your PJ's and you've found yourself on a very dodgy part of youtube (been there, done that)

DONT quit your job yet, there's no rush. Take a few weeks to plan your future accordingly. Plan how you will invest a part of your money, how much do you need as a cash reserve etc. Take a short holiday to recharge perhaps. Some people find the sudden leap from 9-5 to literally nothing, overwhelming.

Good luck!

Malthusian

Audaxer wrote: »

I would say while that is possible, it is by no means certain.

And less certain the longer you have to make it last, which given the OP is 51 and won't have their State Pension for another 16 years is quite a while.

That said, taking a month or two off work, finding a less demanding and less well paid job and using the £200k to make up the difference is a perfectly achievable and reasonable aim, if that's what they want to do.

However sorting out their mental health issues may be a much better investment than simply cutting their hours and sitting around at home. "Low paid retail jobs" are not supposed to be particularly stressful.