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  • FIRST POST
    • c'est moi
    • By c'est moi 16th May 19, 6:06 AM
    • 40Posts
    • 18Thanks
    c'est moi
    Stopping at 48 - is it possible?
    • #1
    • 16th May 19, 6:06 AM
    Stopping at 48 - is it possible? 16th May 19 at 6:06 AM
    I know I need to get professional advice, but if anyone is willing to help me run a through things past them I would be greatful. I want to know if my plan is at all possible please!!!

    I am considering leaving work for multiple reasons. I am 48. I can draw on my work pension in 7 years time - I calculate that will bring in one thousand a month after tax = I assume that I will no longer pay NI. My wife (4 years younger than me) plans to continue to work and her salary is £1500 per month. We have no mortgage and can easily cover all regular bills, food etc on her salary. We have £120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc. I would also get a lump sum of about £35k in seven years time to replenish the savings a little.

    I think the savings should bridge the gap between now and pension paying out in 7 years time. We currently spend about £1000 of my wages per month and save the rest.

    I am confused about my state pension. I have read that I need to pay NI for 35 years to have full pension at 67. I have paid in 29 years so far. Can i/ should I continue to pay in the remaining 6 years of contributions? Again I think I have read that these cost about £700 per year.

    I know that seems a bit vague but I am at a crossroads and not sure what to do. I like the security of savings in the bank and know this will mean they will take a significant hit, though it is possible I could look for a pt job to avoid spending so much of them. I do know that I can't carry on in my current job for much longer.

    Thanks in advance if anyone has any wise words for me.
Page 1
    • Mnd
    • By Mnd 16th May 19, 6:17 AM
    • 1,213 Posts
    • 1,812 Thanks
    Mnd
    • #2
    • 16th May 19, 6:17 AM
    • #2
    • 16th May 19, 6:17 AM
    I think it's too soon for you to be thinking about packing up work if your wife is still working. If your job is becoming unbearable then look for another job
    • Dazed and confused
    • By Dazed and confused 16th May 19, 6:30 AM
    • 4,736 Posts
    • 2,434 Thanks
    Dazed and confused
    • #3
    • 16th May 19, 6:30 AM
    • #3
    • 16th May 19, 6:30 AM
    Forget the 35 years thing for State Pension, it does not apply to you.

    You are under transitional rules and may need fewer or more years to get the maximum.

    Only youngsters starting their NI/State Pension journey in the past few years can rely on the 35 year rule.

    You should check your State Pension forecast on gov.uk. That will tell you what you have accrued so far, probably to 5 April 2018 but may be up to 5 April 2019 if you are lucky.

    And before you ask, no, you don't have to deduct any COPE amount shown.
    • justme111
    • By justme111 16th May 19, 6:35 AM
    • 3,277 Posts
    • 3,144 Thanks
    justme111
    • #4
    • 16th May 19, 6:35 AM
    • #4
    • 16th May 19, 6:35 AM
    I don't see what professionals would do to you - your affairs seem clear and uncomplicated. I don't see why not - we spend our time to get money and if you do not need much of it and have it already why not to dedicate time of your life to something more rewarding than working for money you do not need.
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers to difficult choice between two undesirable options.
    I came across so many occasions when people use the word without understanding what it means I decided to use the definition above as a signature.
    • lisyloo
    • By lisyloo 16th May 19, 6:44 AM
    • 24,030 Posts
    • 12,441 Thanks
    lisyloo
    • #5
    • 16th May 19, 6:44 AM
    • #5
    • 16th May 19, 6:44 AM
    Iím 50.
    My forecast says Iíve paid 33 years and need another 4 so total 37.
    Iíd say get your forecast itís quite easy.

    I would suggest using government gateway.
    I started using secureid but it was a pain with multiple devices.
    • c'est moi
    • By c'est moi 16th May 19, 7:15 AM
    • 40 Posts
    • 18 Thanks
    c'est moi
    • #6
    • 16th May 19, 7:15 AM
    • #6
    • 16th May 19, 7:15 AM
    Thanks for so many fast responses! Some food for thought there.

    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 may seem very selfish to quite whilst my wife still works, but she enjoys her work and I just can't keep doing mine. Thats not to say that I rule out ever working again, but I will NEVER be taking on the stress of my current role again once I quit so I know that I will not be able to match my current income. The question asked by the previous poster "why not dedicate time in your life to something more rewarding than working for money you do not need?" really hit home.

    I guess the biggest fear is the unexpected - the big repair bill or needing to help out someone in the family who needs financial help, but I don't have a crystal ball and don't want to keep doing a job I hate (and am struggling to do) based on what ifs. I do regret that our life savings will be spent on bridging the gap rather than all the luxury holidays I would have liked, but I am now beginning to wonder if my health will hold out long enough to be able to enjoy them in 10 years time anyway!

    Once again, thanks for all the feedback so far.
    • Linton
    • By Linton 16th May 19, 7:49 AM
    • 10,622 Posts
    • 10,981 Thanks
    Linton
    • #7
    • 16th May 19, 7:49 AM
    • #7
    • 16th May 19, 7:49 AM
    Two random thoughts...
    Is your company pension Defined Benefit , eg final salary? If it is have you taken into account the reduction from taking it at 55 rather than normal retirement age? If it is not DB how have you estimated the pension?

    Have you worked through what would happen if you or your wife died? Would the survivor have sufficient income?
    • lisyloo
    • By lisyloo 16th May 19, 8:05 AM
    • 24,030 Posts
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    lisyloo
    • #8
    • 16th May 19, 8:05 AM
    • #8
    • 16th May 19, 8:05 AM
    Your entitled to do whatever you wish but a few thoughts.

    Have you considered a change of role.
    I was very bored of my software development job after 25 years so I took i sidestep into database administration. I had to start at a junior level and it took a couple of months to find a company prepared to take me on (everything in IT revolves around experience) and I had to take a pay cut but my enthusiasm was renewed and I enjoyed going to work every day.
    After a couple of years I’ve got my senior status and pay back as it wasn’t a complete change so my previous experience meant I could move up quickly.

    A second altenative is to do something completely different but still earn a little. Options include dog walking (obviously this depends on your hobbies) house sitting, film extra, be a magistrate, work in the local tourist information (I know lady that did that as she benefitted from knowing what’s going on). It really depends on what you like but if you don’t need a full income then you can focus on choosing something you enjoy rather than the salary and doesn’t have to be full time.
    If you like animals there are plenty of people wanting them looked after when they go on holidays.

    No need to work if you don’t want to but there are a lot of options out there for doing something completely diffferent but still supplementing your pension.
    • CookieMonster
    • By CookieMonster 16th May 19, 9:27 AM
    • 16 Posts
    • 14 Thanks
    CookieMonster
    • #9
    • 16th May 19, 9:27 AM
    • #9
    • 16th May 19, 9:27 AM
    Go ahead, do it if you wish:
    £1000 per months sounds like a very reasonable number without a mortgage - my number (as a single man) is actually lower.
    I'm 50, I've 3 more years NI to pay for full state pension (according to my forecast on the .gov website).
    Back-up plan(s) can include down-sizing the house/relocating to a cheaper area to free up a few years worth of bills before state pension kicks in. With £120K in savings, that's probably not needed.
    Or get a part-time job if the need arises.
    A full time job at Minimum wage for our age covers £1000 pa no problem...
    In your situation: the world is your lobster.
    Last edited by CookieMonster; 16-05-2019 at 9:30 AM.
    • AnotherJoe
    • By AnotherJoe 16th May 19, 9:33 AM
    • 14,222 Posts
    • 16,927 Thanks
    AnotherJoe
    We have £120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc.
    Originally posted by c'est moi
    Over 40 years, with £120k in savings, forget the risk of shares (and do you mean shares rather than funds?) , you'll have far more than your fingers burnt by inflation, think 60% burns. In just 20 years time expect to see that worth at best, 2/3 what it is now.
    Just something to consider assuming this money is for the long term. At worse start creating a savings ladder.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Paul_Herring
    • By Paul_Herring 16th May 19, 9:49 AM
    • 6,778 Posts
    • 3,414 Thanks
    Paul_Herring
    I can draw on my work pension in 7 years time - I calculate that will bring in one thousand a month after tax
    Considering £1K/month is below the current tax free allowance, and almost certainly will be in 7 years, I think you need to re-work on that part of your calculations. Specifically, either on that amount you won't be getting taxed, or if you are getting taxed, it's going to be more than £1K/month.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • SmashedAvacado
    • By SmashedAvacado 16th May 19, 10:03 AM
    • 802 Posts
    • 760 Thanks
    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
    • By c'est moi 16th May 19, 10:31 AM
    • 40 Posts
    • 18 Thanks
    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
    • By c'est moi 16th May 19, 10:35 AM
    • 40 Posts
    • 18 Thanks
    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
    • By Happier Me 16th May 19, 11:59 AM
    • 505 Posts
    • 1,123 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
    • By xylophone 16th May 19, 12:11 PM
    • 29,464 Posts
    • 17,941 Thanks
    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.
    Last edited by xylophone; 16-05-2019 at 12:24 PM. Reason: add bold
    • c'est moi
    • By c'est moi 16th May 19, 2:04 PM
    • 40 Posts
    • 18 Thanks
    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
    • By Marcon 16th May 19, 3:34 PM
    • 955 Posts
    • 733 Thanks
    Marcon
    I do know that I can't carry on in my current job for much longer.
    Originally posted by c'est moi
    In that case you've answered your own question....
    • Socajam
    • By Socajam 16th May 19, 3:35 PM
    • 241 Posts
    • 290 Thanks
    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
    • By Thrugelmir 16th May 19, 4:34 PM
    • 63,105 Posts
    • 56,019 Thanks
    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.
    "'The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.'" - John Bogle
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