Stopping at 48 - is it possible? 16 May 2019 at 7:06AM edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning 39 replies 5.2K views

c'est_moi

I know I need to get professional advice, but if anyone is willing to help me run a through things past them I would be greatful. I want to know if my plan is at all possible please!!!

I am considering leaving work for multiple reasons. I am 48. I can draw on my work pension in 7 years time - I calculate that will bring in one thousand a month after tax = I assume that I will no longer pay NI. My wife (4 years younger than me) plans to continue to work and her salary is £1500 per month. We have no mortgage and can easily cover all regular bills, food etc on her salary. We have £120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc. I would also get a lump sum of about £35k in seven years time to replenish the savings a little.

I think the savings should bridge the gap between now and pension paying out in 7 years time. We currently spend about £1000 of my wages per month and save the rest.

I am confused about my state pension. I have read that I need to pay NI for 35 years to have full pension at 67. I have paid in 29 years so far. Can i/ should I continue to pay in the remaining 6 years of contributions? Again I think I have read that these cost about £700 per year.

I know that seems a bit vague but I am at a crossroads and not sure what to do. I like the security of savings in the bank and know this will mean they will take a significant hit, though it is possible I could look for a pt job to avoid spending so much of them. I do know that I can't carry on in my current job for much longer.

Thanks in advance if anyone has any wise words for me.

Mnd

I think it's too soon for you to be thinking about packing up work if your wife is still working. If your job is becoming unbearable then look for another job

Dazed_and_confused

Forget the 35 years thing for State Pension, it does not apply to you.

You are under transitional rules and may need fewer or more years to get the maximum.

Only youngsters starting their NI/State Pension journey in the past few years can rely on the 35 year rule.

You should check your State Pension forecast on gov.uk. That will tell you what you have accrued so far, probably to 5 April 2018 but may be up to 5 April 2019 if you are lucky.

And before you ask, no, you don't have to deduct any COPE amount shown.

justme111

I don't see what professionals would do to you - your affairs seem clear and uncomplicated. I don't see why not - we spend our time to get money and if you do not need much of it and have it already why not to dedicate time of your life to something more rewarding than working for money you do not need.

lisyloo

I’m 50.
My forecast says I’ve paid 33 years and need another 4 so total 37.
I’d say get your forecast it’s quite easy.

I would suggest using government gateway.
I started using secureid but it was a pain with multiple devices.

c'est_moi

Thanks for so many fast responses! Some food for thought there.

Thanks for the suggestion to look up my NI contributions - have done that. It seems that my time studying for A Levels where I had no income has given me full NI contributions, but the years in university when I had summer jobs did not - seems a bit odd. This year's has not been added yet, but the gap between what I will receive with no further contributions and the full pension is not as much as I feared it would be.

It may seem very selfish to quite whilst my wife still works, but she enjoys her work and I just can't keep doing mine. Thats not to say that I rule out ever working again, but I will NEVER be taking on the stress of my current role again once I quit so I know that I will not be able to match my current income. The question asked by the previous poster "why not dedicate time in your life to something more rewarding than working for money you do not need?" really hit home.

I guess the biggest fear is the unexpected - the big repair bill or needing to help out someone in the family who needs financial help, but I don't have a crystal ball and don't want to keep doing a job I hate (and am struggling to do) based on what ifs. I do regret that our life savings will be spent on bridging the gap rather than all the luxury holidays I would have liked, but I am now beginning to wonder if my health will hold out long enough to be able to enjoy them in 10 years time anyway!

Once again, thanks for all the feedback so far.

Linton

Two random thoughts...
Is your company pension Defined Benefit , eg final salary? If it is have you taken into account the reduction from taking it at 55 rather than normal retirement age? If it is not DB how have you estimated the pension?

Have you worked through what would happen if you or your wife died? Would the survivor have sufficient income?

lisyloo

Your entitled to do whatever you wish but a few thoughts.

Have you considered a change of role.
I was very bored of my software development job after 25 years so I took i sidestep into database administration. I had to start at a junior level and it took a couple of months to find a company prepared to take me on (everything in IT revolves around experience) and I had to take a pay cut but my enthusiasm was renewed and I enjoyed going to work every day.
After a couple of years I’ve got my senior status and pay back as it wasn’t a complete change so my previous experience meant I could move up quickly.

A second altenative is to do something completely different but still earn a little. Options include dog walking (obviously this depends on your hobbies) house sitting, film extra, be a magistrate, work in the local tourist information (I know lady that did that as she benefitted from knowing what’s going on). It really depends on what you like but if you don’t need a full income then you can focus on choosing something you enjoy rather than the salary and doesn’t have to be full time.
If you like animals there are plenty of people wanting them looked after when they go on holidays.

No need to work if you don’t want to but there are a lot of options out there for doing something completely diffferent but still supplementing your pension.

CookieMonster

Go ahead, do it if you wish:
£1000 per months sounds like a very reasonable number without a mortgage - my number (as a single man) is actually lower.
I'm 50, I've 3 more years NI to pay for full state pension (according to my forecast on the .gov website).
Back-up plan(s) can include down-sizing the house/relocating to a cheaper area to free up a few years worth of bills before state pension kicks in. With £120K in savings, that's probably not needed.
Or get a part-time job if the need arises.
A full time job at Minimum wage for our age covers £1000 pa no problem...
In your situation: the world is your lobster.

AnotherJoe

c'est_moi wrote: »

We have £120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc.

Over 40 years, with £120k in savings, forget the risk of shares (and do you mean shares rather than funds?) , you'll have far more than your fingers burnt by inflation, think 60% burns. In just 20 years time expect to see that worth at best, 2/3 what it is now.
Just something to consider assuming this money is for the long term. At worse start creating a savings ladder.

Paul_Herring

I can draw on my work pension in 7 years time - I calculate that will bring in one thousand a month after tax

Considering £1K/month is below the current tax free allowance, and almost certainly will be in 7 years, I think you need to re-work on that part of your calculations. Specifically, either on that amount you won't be getting taxed, or if you are getting taxed, it's going to be more than £1K/month.