Weighing up redundancy and the impact on pensions, early retirement, etc

What_time_is_it

My partner and I have both been offered the chance to apply for voluntary redundancy and we are weighing it up. I'm trying to figure out a "worst case" scenario of if we never actually work again. This will help us to make a decision. Do you think we have enough "in the bank" to cover a scenario where we either take a few years off work, or potentially pretty much retire?

We are both 48.
We have no kids, own our house, no mortgage.
We have work based pension schemes currently worth a combined £15k a year (direct benefit if taken at NRA, less if taken earlier) plus around £200k in direct contribution schemes.
We recently inherited some money and have around £550k in savings accounts between us.
Redundancy payoffs would be worth around £50k between us (tax free)

Would you be tempted to take the redundancy offer?
Do we have enough to cover us for £30-£40k annual expenditure (increasing with inflation) for the rest of our lives? Probably not?

Dazed_and_C0nfused

What_time_is_it said:

My partner and I have both been offered the chance to apply for voluntary redundancy and we are weighing it up. I'm trying to figure out a "worst case" scenario of if we never actually work again. This will help us to make a decision. Do you think we have enough "in the bank" to cover a scenario where we either take a few years off work, or potentially pretty much retire?

We are both 48.
We have no kids, own our house, no mortgage.
We have work based pension schemes currently worth a combined £15k a year (direct benefit if taken at NRA, less if taken earlier) plus around £200k in direct contribution schemes.
We recently inherited some money and have around £550k in savings accounts between us.
Redundancy payoffs would be worth around £50 between us (tax free)

Would you be tempted to take the redundancy offer?
Do we have enough to cover us for £30-£40k annual expenditure (increasing with inflation) for the rest of our lives? Probably not?

Definitely not 😳

Now if it was £50k that might put a different slant on things 😉

What_time_is_it

Dazed_and_C0nfused said:

What_time_is_it said:

My partner and I have both been offered the chance to apply for voluntary redundancy and we are weighing it up. I'm trying to figure out a "worst case" scenario of if we never actually work again. This will help us to make a decision. Do you think we have enough "in the bank" to cover a scenario where we either take a few years off work, or potentially pretty much retire?

We are both 48.
We have no kids, own our house, no mortgage.
We have work based pension schemes currently worth a combined £15k a year (direct benefit if taken at NRA, less if taken earlier) plus around £200k in direct contribution schemes.
We recently inherited some money and have around £550k in savings accounts between us.
Redundancy payoffs would be worth around £50 between us (tax free)

Would you be tempted to take the redundancy offer?
Do we have enough to cover us for £30-£40k annual expenditure (increasing with inflation) for the rest of our lives? Probably not?

Definitely not 😳

Now if it was £50k that might put a different slant on things 😉

Haha! Fair point.
Edited!

Brie

48 seems very young to retire to me.  Then again I was happy to be made redundant (not voluntary) at 64 and promptly went out and got another job, albeit part time.  But I like to get out and I'm working for a charity so that's nice too.

Friends of mine who were younger have taken different routes.  One went from being in a high pressure job to working at Tescos.  Like me it gets him out of the house and keeps him active rather than sitting at home doing nothing.  Another got a part time job bar tending at a small golf club - so lunch service only.  

If working isn't the thing for you then decide what you will do to fill your days.  If I wasn't working I'd have more time to take art classes and do my painting.  

All that aside - have you checked your state pension forecasts?  That will add some ££ later on and will mean you will be able to spend more now.  And how much redundancy money will you get?  That might keep you going for a while and give you more time to plan your future.

Check your State Pension forecast - GOV.UK (www.gov.uk)

What_time_is_it

Brie said:

48 seems very young to retire to me.  Then again I was happy to be made redundant (not voluntary) at 64 and promptly went out and got another job, albeit part time.  But I like to get out and I'm working for a charity so that's nice too.

Friends of mine who were younger have taken different routes.  One went from being in a high pressure job to working at Tescos.  Like me it gets him out of the house and keeps him active rather than sitting at home doing nothing.  Another got a part time job bar tending at a small golf club - so lunch service only.  

If working isn't the thing for you then decide what you will do to fill your days.  If I wasn't working I'd have more time to take art classes and do my painting.  

All that aside - have you checked your state pension forecasts?  That will add some ££ later on and will mean you will be able to spend more now.  And how much redundancy money will you get?  That might keep you going for a while and give you more time to plan your future.

Check your State Pension forecast - GOV.UK (www.gov.uk)

Thanks. Totally agree on the being active points. Chances are that we would both be working again throughout our 50s, but I'm mainly looking at a things from a "have we covered the financial basics" point of view. Our initial plan would be to take a couple of years off and focus on our health and fitness, our hobbies, doing up the house, and some low cost travelling. 

Redundancy money would be worth around £50k between us in total, tax free.
I have 30 years full NI years, and my partner has 28 years, so we are both a little short of the current requirement of 35 years. Obviously a lot could change regarding state pensions in the next 20 years too!

Dazed_and_C0nfused

What_time_is_it said:

Brie said:

48 seems very young to retire to me.  Then again I was happy to be made redundant (not voluntary) at 64 and promptly went out and got another job, albeit part time.  But I like to get out and I'm working for a charity so that's nice too.

Friends of mine who were younger have taken different routes.  One went from being in a high pressure job to working at Tescos.  Like me it gets him out of the house and keeps him active rather than sitting at home doing nothing.  Another got a part time job bar tending at a small golf club - so lunch service only.  

If working isn't the thing for you then decide what you will do to fill your days.  If I wasn't working I'd have more time to take art classes and do my painting.  

All that aside - have you checked your state pension forecasts?  That will add some ££ later on and will mean you will be able to spend more now.  And how much redundancy money will you get?  That might keep you going for a while and give you more time to plan your future.

Check your State Pension forecast - GOV.UK (www.gov.uk)

Thanks. Totally agree on the being active points. Chances are that we would both be working again throughout our 50s, but I'm mainly looking at a things from a "have we covered the financial basics" point of view. Our initial plan would be to take a couple of years off and focus on our health and fitness, our hobbies, doing up the house, and some low cost travelling. 

Redundancy money would be worth around £50k between us in total, tax free.
I have 30 years full NI years, and my partner has 28 years, so we are both a little short of the current requirement of 35 years. Obviously a lot could change regarding state pensions in the next 20 years too!

I don't know what you have read about the State Pension but as you have clearly built up an NI record prior to 2016 having 35 years is of absolutely no relevance to either of you.

You need to check your forecast (read it in full, not just the headline figure) and find out the facts for each of you.

You will no doubt be able to reach the standard £221.20/week, you may already have done that. 

But by checking the facts you will know exactly where you stand and not be reliant on duff info.

born_again

Sounds like a plan.
Enjoy life while you can for a few years & then think about new jobs later.

Who knows what life brings, so enjoy it while you can. 😍

What_time_is_it

Dazed_and_C0nfused said:

What_time_is_it said:

Brie said:

48 seems very young to retire to me.  Then again I was happy to be made redundant (not voluntary) at 64 and promptly went out and got another job, albeit part time.  But I like to get out and I'm working for a charity so that's nice too.

Friends of mine who were younger have taken different routes.  One went from being in a high pressure job to working at Tescos.  Like me it gets him out of the house and keeps him active rather than sitting at home doing nothing.  Another got a part time job bar tending at a small golf club - so lunch service only.  

If working isn't the thing for you then decide what you will do to fill your days.  If I wasn't working I'd have more time to take art classes and do my painting.  

All that aside - have you checked your state pension forecasts?  That will add some ££ later on and will mean you will be able to spend more now.  And how much redundancy money will you get?  That might keep you going for a while and give you more time to plan your future.

Check your State Pension forecast - GOV.UK (www.gov.uk)

Thanks. Totally agree on the being active points. Chances are that we would both be working again throughout our 50s, but I'm mainly looking at a things from a "have we covered the financial basics" point of view. Our initial plan would be to take a couple of years off and focus on our health and fitness, our hobbies, doing up the house, and some low cost travelling. 

Redundancy money would be worth around £50k between us in total, tax free.
I have 30 years full NI years, and my partner has 28 years, so we are both a little short of the current requirement of 35 years. Obviously a lot could change regarding state pensions in the next 20 years too!

I don't know what you have read about the State Pension but as you have clearly built up an NI record prior to 2016 having 35 years is of absolutely no relevance to either of you.

You need to check your forecast (read it in full, not just the headline figure) and find out the facts for each of you.

You will no doubt be able to reach the standard £221.20/week, you may already have done that. 

But by checking the facts you will know exactly where you stand and not be reliant on duff info.

Thanks. Sounds like I am misinformed on the state pension requirements and need to do some more fact finding.
My forecast states that I have 29 full years and need another 6 years to qualify for the full state pension. I will have made enough contributions to get to 30 years within the next couple of months, so I know I have 30 years "in the bank". The wording of the forecast does make it look like I need 35 years to get the full amount of £221.20 a week. At the moment it shows a proportionate amount of £186.28 a week up to April 2024 so, again, this looks like about 29-30/35th. 
I'll look into this more, as I'm not sure what I'm missing here.

Brenster

I think 48 is too young to 'retire' however maybe all you need is a 'gap year', if i was you i would take the redundancy, live life over the next 12 months (for me if without kids, this would be to travel the world, but each person has different ideas), and re-evaluate your position when you return.  I imagine at this stage you will be refreshed and ready for your next (perhaps less stressful) challenge / career move.... Perhaps rent out your house for the year you are away (if thats what you do).
Well done on being in such a good position at such a young age.
Good Luck

Dazed_and_C0nfused

What_time_is_it said:

Dazed_and_C0nfused said:

What_time_is_it said:

Brie said:

48 seems very young to retire to me.  Then again I was happy to be made redundant (not voluntary) at 64 and promptly went out and got another job, albeit part time.  But I like to get out and I'm working for a charity so that's nice too.

Friends of mine who were younger have taken different routes.  One went from being in a high pressure job to working at Tescos.  Like me it gets him out of the house and keeps him active rather than sitting at home doing nothing.  Another got a part time job bar tending at a small golf club - so lunch service only.  

If working isn't the thing for you then decide what you will do to fill your days.  If I wasn't working I'd have more time to take art classes and do my painting.  

All that aside - have you checked your state pension forecasts?  That will add some ££ later on and will mean you will be able to spend more now.  And how much redundancy money will you get?  That might keep you going for a while and give you more time to plan your future.

Check your State Pension forecast - GOV.UK (www.gov.uk)

Thanks. Totally agree on the being active points. Chances are that we would both be working again throughout our 50s, but I'm mainly looking at a things from a "have we covered the financial basics" point of view. Our initial plan would be to take a couple of years off and focus on our health and fitness, our hobbies, doing up the house, and some low cost travelling. 

Redundancy money would be worth around £50k between us in total, tax free.
I have 30 years full NI years, and my partner has 28 years, so we are both a little short of the current requirement of 35 years. Obviously a lot could change regarding state pensions in the next 20 years too!

I don't know what you have read about the State Pension but as you have clearly built up an NI record prior to 2016 having 35 years is of absolutely no relevance to either of you.

You need to check your forecast (read it in full, not just the headline figure) and find out the facts for each of you.

You will no doubt be able to reach the standard £221.20/week, you may already have done that. 

But by checking the facts you will know exactly where you stand and not be reliant on duff info.

Thanks. Sounds like I am misinformed on the state pension requirements and need to do some more fact finding.
My forecast states that I have 29 full years and need another 6 years to qualify for the full state pension. I will have made enough contributions to get to 30 years within the next couple of months, so I know I have 30 years "in the bank". The wording of the forecast does make it look like I need 35 years to get the full amount of £221.20 a week. At the moment it shows a proportionate amount of £186.28 a week up to April 2024 so, again, this looks like about 29-30/35th. 
I'll look into this more, as I'm not sure what I'm missing here.

You might need 35 years but your entitlement will be based on your starting/foundation amount calculated in 2016 and then each post 2016 years adds to that, eventually reaching your personal maximum of £221.20.

The years needed for those under transitional rules range from 28/29 to 50+.

At least you know your own personal situation now.

Simon11

In your situation, I would consider semi-retirement, finding a part-time job or part-time consultancy projects to bring in 10-15k per year for tax purposes + grab your pension credits. So you have some work still but have much more time to enjoy your leisure time!

I have although thoughts I would get involved with a summer job in the UK (or do a consultancy project over the winter period) which is relaxing and peaceful, then use the other time to travel abroad to sunnier places!