job ending 4 years before retirement age.

TopKnot

Hello, I am new to the forums and seeking views as I am feeling somewhat confused and vulnerable.

I am female, 61, state pension starts Oct 2023. I currently have a workplace pension with L&G and the combined monthly contribution which is topped up by me as a salary sacrifice to keep me just outside Higher Rate Tax is £604 pcm.
This pension pot currently holds £16,540
I have an additional pension in Aviva , into which I pay £250 pcm which today is worth £222k.
I have another £40k in bank savings, NS&I Growth Bond, Premium Bonds and an ISA.
I might reasonably stand to inherit about £100k from relatives within 5 years.
I am mortgage free
My youngest daughter is 17, and will start Uni in Sept 2020 after a gap year.

My job is very much under threat. I know this as I am part of the SLT making the necessary re-structures that will precipitate it. I could be redundant at the beginning of the next financial year. It is not an organisation that can offer big packages as it is a charity, but I have worked there 20 years. It will be statutory, plus a tiny bit extra.

I am unlikely to find work of an equivalent salary for a range of reasons. But I will be wanting employment.

How the hell will I support my daughter through Uni - as I believe the first year in the finance system will be based on my current year's income?

Can I actually afford to live on a subsistence salary for 4 years and then retire?

Should I pull all my money out of my pension now(or when I finish work) and put it into a flat to rent out to see me through they years before my state pension kicks in and beyond?

I could downsize from my current house and liquidate about £100k once my daughter goes to Uni.

A lot of questions, but it would be very useful to hear what forum members think I should look into, and what to beware of.

Many thanks.

Thrugelmir

Adjust your financial planning accordingly. Reduce your pension savings and hold more cash on short term deposit. To fund you through the next few years.

xylophone

and put it into a flat to rent out to see me through they years before my state pension kicks in and beyond?

Do you want to be a landlord and do you know anything about this business?

Would you wish to risk an entire pension on one asset? (Not to mention what you would be paying in tax if you withdrew your pensions in one lump sum.)

Have you obtained a state pension forecast?

Have you had an interview with Pension Wise to explore your options?

Would not a combination of drawdown and some sort of salary keep you above "subsistence level"?

AnotherJoe

TopKnot wrote: »

How the hell will I support my daughter through Uni - as I believe the first year in the finance system will be based on my current year's income?
Maybe she could defer for a year.. many do?she could Get a job?
Can I actually afford to live on a subsistence salary for 4 years and then retire?

Should I pull all my money out of my pension now(or when I finish work) and put it into a flat to rent out to see me through they years before my state pension kicks in and beyond?

I could downsize from my current house and liquidate about £100k once my daughter goes to Uni.

Of course not Why on earth do so many posters here seem to think that becoming a landlord is the route to instant riches?. Your daughter will likely be graduated before you even break even what with the extra 3% SDLT and all the other start up costs. And that's aside your crazy nuclear option of throwing so much away by cashing all your pension in you'd never ever break even,

Daughter defers
You get another job.
Don't downsize until she's finished and because they will likely take that additional money released from the house into consideration for the grant.

LHW99

It appears you can ask for your current income to be assessed rather than the previous year, if it has changed by more than 15%
http://media.slc.co.uk/sfe/currentyearincome/index.html
Worth checking if need be.

tacpot12

Do you know how much it will cost you to live when 'retire'? I found it very useful to produce a budget showing what it cost me to live while working, and what it would cost to live in retirement.

I would treat the money your daughter needs to get through University as a separate pot, and earmark an amount that is reserved for this. I would also suggest that your daughter should get a job, as this will improve her CV as well as reducing the financial burden on you.

I would not assume that your inheritance will arrive when you expect it to. I don't know the source of this, but the inheritance could be substantially reduced if the provider needs more care in the near future.

I would not look to downsize until you know where your daughter will be living and working after graduation.

I would not recommend buying a residential property to let. The regulatory burden on landlords is increasing, landlord protections are being withdrawn, and property prices are falling.

If you post back some idea of what you will need to live on, and how much of your savings you want to reserve for your daughter to complete her education, we could perhaps offer some opinion on whether your pensions can support you without working. Any work you do will then go to enrich your 'retirement'. My initial view is that you probably have enough money saved to not have to worry too much.

bluenose1

As others have said you need to work out how much you need to live on per year.
Then you need to work out when your L&G Pension will be paid and how much it will be.
What age do you qualify for State Pension? And have you worked out if you have full entitlement.
At least you have been able to save quite a bit into your Aviva pension and have paid your mortgage off.
My two eldest went to University and I didn't have to help them that much financially as they got loans for their fees and P/T jobs to support themselves etc.
The thought of redundancy is very worrying but hopefully when you work the figures out it won't be as bad as you are fearing.

Brynsam

TopKnot wrote: »

How the hell will I support my daughter through Uni - as I believe the first year in the finance system will be based on my current year's income? Maybe you can't afford to do so. Many students have to get jobs to support themselves, or at least supplement parental contributions. There's no mention of her father - could he help?

Can I actually afford to live on a subsistence salary for 4 years and then retire? You're the only one who can answer that. Sit down and work out what your essential outgoings are, then add in the extras which make life worth living for you and your family, and see what the outcome looks like. There are always savings to be made - watch some of the financial makeovers on TV for ideas, particularly on mobiles, utilities, insurance, cars, food shopping.

Should I pull all my money out of my pension now(or when I finish work) and put it into a flat to rent out to see me through they years before my state pension kicks in and beyond? Not if you've come to your senses before doing so!

I could downsize from my current house and liquidate about £100k once my daughter goes to Uni. Research that and see what you could get/where and whether it would make you happy.

Hope some of the above might be some help.

badmemory

Even statutory redundancy will give you 30 weeks pay of which £30k will not be taxed. When this was likely to happen to me I worked out that even with no belt tightening at all I could last 9 months & with some belt tightening I could last a year.


So next financial year (Apr 20) you are 62, live for a year on the redundancy money (Apr 21) you are 63. Sign on for 6 months will stretch it a little more. Find a job - any job & it stretches to 64 (Apr 22) & you are almost there.


The great thing I found was being mortgage free. It means no-one is going to take the roof from over your head any time soon.


You are (quite understandably) worrying over the future, but please don't make any decisions whilst you are in this panic mode. It really won't be as bad as you fear. Just see what/how little you can live on excluding work expenses for this next year & the treats that you buy because you've had a bad week at work.

kangoora

How much do you think it's going to cost to live at Uni?

We financed both of our son's rent and gave them £60/week during term-time - reduced it to £20/week for holidays when they came back home. That covered food and a bit over for some drinks each week, if they wanted to party like mad we said you need to get a part-time job to fund that I'm pretty sure they never spent more than £30/week on food - lots of pasta and shopping at Aldi

Rent was around £4k/year for student accom and 'spends' worked out at £2.6k - total of circa £7k/year after we chipped in a bit for text books at start of each year. So, around £21k over 3 years plus some petrol dropping them off and picking them up.

Both son's survived fine on that - they still have the student fees to pay but there were limits to what we could afford.

Looks like you have ample cash for this level of spending - of course if you want to pay your daughters student fees, top of the range accomodation & bags of spending money then it could cost substantially more.

Our sons went to Northern Uni's, so probably a lot cheaper than something south, or certainly London.

One final thought (your daughter may not be keen on it), is there a local Uni she could go to which means she could live at home and attend Uni?

OldBeanz

LHW99 wrote: »

It appears you can ask for your current income to be assessed rather than the previous year, if it has changed by more than 15%
http://media.slc.co.uk/sfe/currentyearincome/index.html
Worth checking if need be.

This is what we did with one of our sons by making massive pension contributions. Quite straightforward process to have funding based on present year’s salary.
You should also be able to start a part time job to keep any perceived wolf from the door.