Redundant at 50... retiring early

Topiary

Hi all. Appreciate I may not be the typical individual looking for retirement advice on here...

:Full disclosure:

50 year old single male no partner/ dependents.

Own a fully renovated house (circa 300k) with mortgage paid off. No outstanding debts/ loans

175K cash in savings sitting in low interest instant access savings accounts (60k of which in cash isas)

Pension including state if taken at 65 will equate to circa £16-18Kpa
(Have 7 years of NI payments to make to achieve the full state pension...should be 5 but appears 2 were contract out of serps during the 1980's apparently)

Made redundant from service industry recovering from medical condition/operation not registered unemployed or claiming benefits. Not looking to return to regular work in that industry or with another company for that matter. May consider at some stage doing something from home.....have a spare room plus a workshop.

Like where I live. I'm self reliant i.e good cook and handy with diy home/ vehicle maintenance etc. I'm also frugal my energy costs are less than £1 a day maybe £1.50 max in the winter (free wood/ open fires) My hobbies are basic (you could say anti-social:)) and therefore do not involve much cost diy/ internet/ gaming/ batch cooking/ baking/ working out/ walking/ hiking. Do not currently own a motor vehicle as have not much use for one....my city has nearby shops/ services and good transport links etc. Don't take holidays. Thinking about getting a dog maybe a classic vehicle at some stage.

Current living expenses are less than £300 per month = £3600 PA

Would certainly enhance my existence to be spending say £7.5k- £10k per annum but not until my financial situation is clearer i.e still coming to terms with drawing off life savings when I no longer have a regular monthly pay cheque to rely on.

Q.Looking for advice on how to best utilise (save/invest) the £175k which I'm currently drawing down until I start taking pension at 65....another 15 years time.
Q Should I consider registering as unemployed up to the time I Claim my pension at 65?
Q What are the Tax implications? I have only previously worked for companies and have never submitted a tax return......when do I need to submit a tax return as have never done one.

Bazofts_Revenge

You need to make sure you are still paying enough NI into the system to get your full state pension when the time comes. If you go on JSA you will have to prove you are looking for work. You will be entitled to Contibution based JSA for the first 6 months (unless I am out of touch with current policy).

Stubod

...living off £3600 per year!! wow..I am impressed, we pay half that in council tax alone!!!

15 years to go to private pension, and probably 17 to state. So you need 175k to last 15 yrs. With a fairly low risk investment (eg S&S ISA) if you can get 4% return and take out "10k per annum increasing by 3.5% for inflation this should still leave you about 50K at the end of 15 yrs.....

yes register as un-employed and you should get approx £66 per week for 6 month subject to job finding activities,

No tax to pay if your "income" is less than £11k 'ish, (You will be self funding via a tax free ISA)...so I don't think there is any need to do a tax return

Topiary

Bazofts_Revenge wrote: »

You need to make sure you are still paying enough NI into the system to get your full state pension when the time comes. If you go on JSA you will have to prove you are looking for work. You will be entitled to Contibution based JSA for the first 6 months (unless I am out of touch with current policy).

Thanks. This was really a side issue i.e. In my situation is it in my interests to register as unemployed. I am not looking to claim JSA.

Topiary

Stubod wrote: »

...living off £3600 per year!! wow..I am impressed, we pay half that in council tax alone!!!

15 years to go to private pension, and probably 17 to state. So you need 175k to last 15 yrs. With a fairly low risk investment (eg S&S ISA) if you can get 4% return and take out "10k per annum increasing by 3.5% for inflation this should still leave you about 50K at the end of 15 yrs.....

es register as un-employed and you should get approx £66 per week for 6 month subject to job finding activities,

No tax to pay if your "income" is less than £11k 'ish, (You will be self funding via a tax free ISA)...so I don't think there is any need to do a tax return

Thanks for reply. I foresore my situation approximately 2 years ago and have had time to adapt.

Yes £3600 is quite frugal I pay £91 per month in council tax which is my highest cost. Use aldi for shopping and focus on price per kg. batch cook/ no takeaways or ready meals. I actually eat healthier now then when I was working. Make my own sour dough for pizza and pastries etc. Brew my own beer and wine having the spare time helps.
Pay for no one's services.....learn to cut my own hair. Repair my own house.

Regards registering unemployed I am not looking to claim JSA as I am not seeking employment. Just wondered if it would otherwise benefit me in my situation.

Thanks for your advice regard stocks and shares isa. I have circa 60k I can transfer from my cash isa into S&S ISA and have yet to use this years allowance 20K = total 80K available to invest. question is it a good time to invest in the stock market now?...though appreciate stock market is a long term investment....15years

Any ideas for the remaining 110K?. Unfortunate apart from savings accounts and cash isa I'm not up on the stockmarket and alternative investments. Time to start learning.

Toddy2

What about a buy to let? Would also give you a focus in retirement?
Hope all works out for you.

gallygirl

How about letting your spare room out on airbnb? No tax unless you earn a massive amount (covered by the Rent-A-Room scheme) and would give you some company.

jojorose

I took early retirement at 56. I have different circumstances to you in that im female and married.

I checked the state pension calculator and i am forecast to get a full pension.

I drew down a small pension to pay the bills for the next eleven years. This account never ever gets touched.

I personally wouldnt sign up for jobseekers its frankly not worth the grief the DWP would be on your back the whole time to see what jobs you have applied for. Job seekers is a contract to job seek!

AirnB is a great idea. We will do this in the summer if funds arent good.
Life is too short just enjoy it.

LHW99

There might be a benefit in signing on if you could get some NI credits. See
https://www.gov.uk/national-insurance-credits/eligibility

Topiary

Toddy2 wrote: »

What about a buy to let? Would also give you a focus in retirement?
Hope all works out for you.

Cheers. Trickey to get a mortgage when you are not employed. An option may be to sink my saving into a local retirement flat and receive a steady income off that. can manage/maintain it myself.

gallygirl wrote: »

How about letting your spare room out on airbnb? No tax unless you earn a massive amount (covered by the Rent-A-Room scheme) and would give you some company.

I don't know if I could endure strangers in the house.....think prefer my own company though its a good option further down the line if it comes to the crunch.

Topiary

jojorose wrote: »

I personally wouldnt sign up for jobseekers its frankly not worth the grief the DWP would be on your back the whole time to see what jobs you have applied for. Job seekers is a contract to job seek!

Life is too short just enjoy it.

LHW99 wrote: »

There might be a benefit in signing on if you could get some NI credits.

Thanks for replies

Yes definite not looking to claim JSA though will enquire about possible NI credits.