Resignation date - any advantage in doing it at the start of a tax year?

Sarahspangles

There’s an advantage to working your last day before Sunday 30th March - that’s when the clocks go forward!

ali_bear

Do you need to start drawing taxable pension income straight away, or can you live off savings and/or lumps sums for a while. 

Would you consider going back into work in the next 1-2 years, or is this definitely it? You could find you hate being idle, or a good opportunity could come along. 

Maybe consider leaving once you have earned up to the tax free allowance for the 25-26 tax year. 

FIREDreamer

Brie said:

Any possible redundancy coming up?  I nearly* sang Hallelujah when the company I worked for told us they were closing our location as I knew I'd get a year's pay tax free.  And could retire too.  And take all my stock options.

*I didn't.  First off I don't have that good a singing voice and it would have been a slap in the faces of all my colleagues who being 30+ years younger than me were immediately panicking about their futures.  

Stock options?

You must have been the big cheese there! 😃

Albermarle

Triumph13 said:

The only dates that have any financial advantage are:

1. When you qualify for any bonus payment from work;
2. When you have earned enough to get a year's NI stamp;
3. End of May, to benefit from being paid for the two days off at Easter and the two bank holidays in May;

With the possible exception of #1, none of those is enough to keep working at a job you don't enjoy if you don't need to.

There can also be some benefit from working for a few months into the tax year if you have a good salary and normally pay a significant amount of 40% tax.
As a simple example if you earn £100K, each month you will pay some 40% tax. If you retire 6 months into the tax year and have no other income that tax year, then all the 40% tax you have paid will be refunded, as over the year you will have only earned £50K.

pterri

FIREDreamer said:

Brie said:

Any possible redundancy coming up?  I nearly* sang Hallelujah when the company I worked for told us they were closing our location as I knew I'd get a year's pay tax free.  And could retire too.  And take all my stock options.

*I didn't.  First off I don't have that good a singing voice and it would have been a slap in the faces of all my colleagues who being 30+ years younger than me were immediately panicking about their futures.  

Stock options?

You must have been the big cheese there! 😃

I wish… no stock options. There is a small performance related pay bonus thing buts it’s not significant enough to keep me until July  

nicknameless

My friend just do it.

BrilliantButScary

ali_bear said:

Do you need to start drawing taxable pension income straight away, or can you live off savings and/or lumps sums for a while. 

Would you consider going back into work in the next 1-2 years, or is this definitely it? You could find you hate being idle, or a good opportunity could come along. 

Maybe consider leaving once you have earned up to the tax free allowance for the 25-26 tax year. 

' You could find you hate being idle'  you could be 'Busy doing nothing' Bing Crosby (1949)

Look at all those bike rides you could go on and coffees you could drink (instead of being in a meeting)

Will going in April instead of July seriously impact your wealth?

Just an alternative view

Bobziz

This may help https://youtu.be/qn_dsQ3-O5s?si=7AhUJ5r0ZdFbbojj

ali_bear

I remember watching that James Shack video while I was planning my own retirement and he has a few valid points about the time of year. But I can't remember what he was saying about the tax aspect. 

For me it is about making full use of the tax allowances and I'd like to not trigger the MPAA too soon just in case I do decide to return to the workplace, although this is unlikely I do like having flexibility in my plans. 

It depends on the individual's circumstances. 

SandyShores

If it was me I'd make sure I was retired by the time the spring came so I could enjoy the whole spring/summer.