When to retire

Baldytyke88

I work term-time, so we break up in July. I have been told to set my retirement date as 1st Sept before schools reopen, in order to gain more holiday pay.

Would it work?

El_Torro

It might work, you tell us!

I don't see anything inherently wrong with retiring at the beginning of September. Although many people who have retired say that timings wise it's good to do it at the start of Spring, to get some months of decent weather before Autumn comes along.

As long as you are financially secure and don't need your salary any more it's really up to you when to retire.

la531983

I suspect it makes the admin easier to set retirement date as 31st August rather than July, however. My partner works in a school (not a teacher) and is paid for the 40 weeks, plus the statutory holidays, and this is then averaged throughout the year to ensure she gets paid the same each month. If you set it as July rather than August there would likely have to make a complex readjustment of your final July pay.

Not sure if you could get away with setting it as 1st September though, suspect it doesnt work like that.

jackieblack

https://forums.moneysavingexpert.com/discussion/comment/81946006#Comment_81946006

Baldytyke88

There may be an adjustment due, although anecdotally I have heard of schools that (incorrectly) don't do this unless requested to do so.

However, it does depend on when you started working at the school - for example, if you started in September, you would be owed. However if you had started in June or July, for example, there may not be, and in some cases money can be owed back to the school and deducted from final pay - in very simple terms, it is because you would have been paid during August in your first year of employment, despite not having worked there long enough to accrue the payment received in August.

It is a complex calculation, our HR have a spreadsheet which calculates the % of contracted hours worked during the year vs the % of pay received, the difference is the adjustment that is made in the final month's pay.

Marcon

https://forums.moneysavingexpert.com/discussion/6662202/when-to-retire

Have you asked whoever told you to do this? What does your contract say about giving notice?

Baldytyke88

https://forums.moneysavingexpert.com/discussion/comment/81946808#Comment_81946808

A colleague told me this, to maximise holiday pay. I have work their for many years, so three months notice is required.

I don't see any harm in setting 31st Aug or a few days after as the retirement date, my pay is averaged out for the whole year

Purplelady65

I know some teachers who have done this. They set their retirement date for 31st August as they were then paid for the summer holidays but left just before the new school year started.

jackieblack

Teachers T&C of employment are entirely different to support staff

Baldytyke88

https://forums.moneysavingexpert.com/discussion/comment/81946002#Comment_81946002

I was going to retire last year, but I enjoy my job and the routine that I am in fits with my life.

Money is also a factor, I am going to send the notice to quit email and retire after Christmas.

I have been stressing and another few more months of pay will help. I just started an AVC this month, although its only £134 out of my pay. I am sure I asked for £500 per month when I filled the form in, online.

PipneyJane

https://forums.moneysavingexpert.com/discussion/comment/81973822#Comment_81973822

Please take a good look at your payslip @Baldytyke88. Is the £134 AVC payment the net effect on your take-home-pay or is it all they deducted?

If the former, it is because your AVC payment is deducted from your salary before tax is paid, so it's impact on the money in your pay packet will be much lower than the full amount paid to the scheme. If the latter, there may be some rule in your school's scheme which prevents more than a certain percentage of your salary being paid into their AVC.

(I write this as someone whose take-home-pay actually went up(!) when I joined my old employer's pension scheme, 20 years ago. That's because it stopped me paying any tax at 40% and also reduced my NI contributions.)

HTH

• Pip

Baldytyke88

My payslip says -£134 salary sacrifice AVC, It also says at the bottom salary sacrifice AVC £1, maybe fees?

I have post about AVC on my employer's Facebook group and some people are interested, it does seem too good to miss if you are close to retirement.

I will pay in a lump sum if I am allowed, although is it allowed to take you below minimum wage? Maybe I am getting mixed up with something else.