Stopping at 48 - is it possible?

SmashedAvacado

would it be best to continue to use some of your savings each year to pay into your pension fund to get the benefit of the tax free allowance regardless of not earning. You won't need all of your 120k now so paying 2880 of it into your pension a year will grow your pot for later.

c'est_moi

Hi
Once again thanks for all of those things to ponder. I have worked out my pension based on it being reduced for taking it early and have put that figure through a tax calculator/ take home pay calculator, so I am pretty confident with the figures, but as you say the tax threshold will change over the next 7 years so I can't know to the exact £ what my monthly pension will be.

I know that savings are losing money in real terms, but as I don't see the whole£120 000 being there for decades then I don't know how much of a 'loss' that will continue to be. I am not at all financially savvy and the thought of dipping into any kind of investment again scares me. My motto thus far has been pay off debts first and put as much into savings as possible. Hence mortgage paied off several years early allowing the savings pot to accumulate.

What happens to my wife if I die? that is a concern. i currently have very good death in service terms which I would clearly lose. The house is an asset thought and could be sold or maybe rented - its too big for us and in an area where rentals are sought after. This income could pay for a much more affordable place.

I will be looking into PT or short term contract work - I know that I have potentially many years ahead of me and doing no work whilst soundly very attractive right now might lose its appeal fairly quickly.

c'est_moi

A bit of clafication - my salary is part final salary, part career average. I know what is currently in there and I will take a 20% cut on that if I draw it at 55.

I had not thought about paying more into it once I leave work - I'm not sure if I can. And - sorry for being dim - what is a savings ladder?

many thanks

Happier_Me

I'm 44 years old and work in a job I hate most of the time and I know its affecting my mental health, so I understand your predicament. For me, the benefits still outweigh the negatives (for now) and that's because the benefits contribute to my early retirement plans and I've not reached the point yet where I want to jeopardise those plans.

So how about a change of outlook here? Your wife is happy for you to leave work presumably! You can afford to pay your bills and have a life using savings! So why not hand in your notice with a view to having a short career break - have the summer off effectively and look for something else, temporary or permanent, in the Autumn to keep your savings topped up. No pressure to earn loads, but enough so you can afford those holidays when you both retire.

You won't be retiring as such, but on the path to a lifestyle change that benefits you and your family overall.

The only question I have I suppose is plans for your wife to retire... is it possible she could start to resent you and the situation if, in 10 years time she's still at work with no scope for retirement because of the decision you've made to retire so much earlier? You really need to give this some thought.

xylophone

I had not thought about paying more into it once I leave work -

You won't be able to contribute to this occupational pension once you leave the employment.

If you don't go back to work and have no relevant earnings, you could still contribute up to a net £2880 to a personal pension and the provider would claim £720 from HMRC and add it to the pension.

If you return to work, the employer will almost certainly offer a workplace pension.

However, aside from all that, are you sure that your next immediate step isn't to see your doctor?

The way you write reminds me of somebody I knew well who woke up one morning and could not bring himself to go to work- "everything is going round and round in my head..."

He did return successfully, but only after six months off ("under the doctor" as they say) when he returned to the same employer but a new department.

Food for thought? Best wishes.

c'est_moi

yes - already under doctors orders - thanks for the good wishes. Under her advice I am making no decisions whilst I am not feeling 100% but it can't hurt to think of other options.

No, I didn't think I could carry on paying into my work pension if I leave but had not thought about setting up a new pension. I suppose I had dismissed it because I didn't think I would be paying in to it for very long. Is there any point paying into one for say 5 years? I know there is probably no easy answer to that!

Marcon

c'est_moi wrote: »

I do know that I can't carry on in my current job for much longer.

In that case you've answered your own question....

Socajam

I agree with those you suggest part time work.
You are at a stage in your life where you have choices. Get a job doing 3 days per week and spend the other 2 days enjoying your life.
The 3 days per week money added to the 1,000.00 should not see much change in your lifestyle.
You are one like myself with not having a mortgage which puts you in a much better problem than a large number of the population your age.

Thrugelmir

Change your job. Even if it results in a cut in salary.

Be warned though. As you get older you'll finder harder to get back on the ladder. Age and over qualification will discriminate against you.

FatherAbraham

c'est_moi wrote: »

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 might seem odd, but it's correct.

NI credits for youngsters who stayed on at school were introduced to encourage better qualifications. Loss of three years of contributions was particularly damaging when men needed 44 years of contributions to qualify for full state pension.

However, no such incentive for university study was ever introduced.