Early retirement idea - is it a stupid one?

jamesd

Middlestitch said:

That wording indicates their confusion. Contracting out doesn't leave anyone 'x years short of qualifying for a full state pension'.

Enable2's situation after being contracted out for 31 years (until 2016) left them 8 years short of the full single tier state pension in April 2016, 4 now. Had they not been contracted out for so long they would be at or over the maximum back in 2016. Which seems to be what you were incorrectly asserting wasn't possible.

Of course that's different from the over £300 maximum state pension that a congtracted in lifetime high earner could  have accrued.

nigelbb

Audaxer said:

Hi there, as your exit pay and lump sum cover your outstanding mortgage that seems a good plan. It just depends whether you can afford to live on £15,571 gross a year (including paying off the course fees and maintenance loan) until you get your State Pension in about 12 years time? How much would the course fees and loan payments amount to?

Surely this doesn't need to be considered as the OP is never going to have enough income to need to repay the student loans? It's free money.

MallyGirl

nigelbb said:

Audaxer said:

Hi there, as your exit pay and lump sum cover your outstanding mortgage that seems a good plan. It just depends whether you can afford to live on £15,571 gross a year (including paying off the course fees and maintenance loan) until you get your State Pension in about 12 years time? How much would the course fees and loan payments amount to?

Surely this doesn't need to be considered as the OP is never going to have enough income to need to repay the student loans? It's free money.

Absolutely. Loans (maintenance loan and tuition fee) from Student Finance don't have to be repaid until your earnings are over £25k and then only 9% of the earnings above that limit.
It sounds like a great opportunity to me. Once you finish the course and no longer receive the maintenance loan you would have the option of getting a part time job if you felt you needed to.

Albermarle

There was another poster some time ago , who was going to do the same but only to get the free money . They planned to only attend the absolute minimum of lectures and no intention of getting a qualification. 
It caused some moral outrage as it would cost the state > £45K 

Enable2

Many thanks for all your replies and views to date. I'm finding them all very helpful and insightful and I'm glad I shared my dilemma on here.
If I was accepted for the degree course and received the funding I would have absolutely every intention of completing it - it's been a dream of mine for years and I may look to do some part time teaching (adult education) with it afterwards.
To take the plunge is SUCH a difficult decision though. On the one hand Voluntary Exit schemes at my place of work are pretty rare so it seems like the perfect opportunity. But on the other I'm not certain it's entirely wise for me to take early retirement from a stable (so far) job in these challenging pandemic times when I don't have the unallocated savings I might have had to fall back on in case of an emergency and we don't really know what lies ahead. I'm already comfortable with frugal living but I definitely need to be able to study without worrying about money.
'Feel the fear and do it anyway' they say. Yes but no but yes but no.....

Bobziz

If I were in your situation I'd go for it now. Ageing parents can take an awful lot of time, physical and mental effort to care for, so the longer you leave it the harder it will be to juggle caring and studying. He who dares Rodney !

NedS

This seems to be an increasingly popular option. I know a couple colleagues who have packed in their jobs towards the end of their careers and gone to Uni to do a degree as they missed out on the opportunity first time around. They happily take the loans/grants knowing they will never earn enough to have to pay them back as they plan to retire as soon as they've finished the course.

bluenose1

Totally understand your dilemma, was in a similar one myself but my VR offer was a lot less than yours. When  you say your gross pension will £15,571, half of current salary. Have you took into account in net terms it will be more than half as you won’t have  to pay pension or NI contributions. 
Also if your parents qualify for DLA, or you think they may do in the future Carers Allowance gives you your NI contribution. 

I also considered taking VR and going to University but have decided to carry on working for now. Though would have been a lot more tempted if my VR had been as much as yours.
Good luck with your decision.

theoretica

If you don't pay everything off the mortgage you could keep some savings, at the expense of interest rates.  It might be worth calculating.  If you are doing the degree course part time, you would have more time available - you say your parents may need you for some of this time, but could you earn extra to build up your savings?