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Change of Retirement Plans

Discussion in 'Retirement' started by djhappy, Mar 31, 2020.

  1. djhappy

    djhappy New commenter

    It does seem to be odd thinking about September at the moment, but the current crisis has changed our plans. I am taking my pension at the age of 57 in September, and the money from the sale of our house was going to allow us to pay off our mortgage, relocate to another part of the UK and live mortgage free.

    Obviously, our house will now not be sold by September so we will have to stay put and continue to pay our mortgage. My lump sum could tide us over for up to a year (though that is not how I envisaged using it). It also looks like I will have to find some sort of employment to keep me going.

    My question - if I have taken my pension is there any limit to the type of employment I could take, how much I can earn or how often I can work?
  2. Sundaytrekker

    Sundaytrekker Star commenter

    If your work is outside teaching then there is no limit. Also, as you are under 60 you will be taking your pension early so there is no limit if you do decide to take any teaching position again. Of course, you’ll be paying tax and national insurance on earned income subject to normal thresholds.
    Morninglover likes this.
  3. djhappy

    djhappy New commenter

    Thank you Sundaytrekker. That's really helpful.
  4. diddydave

    diddydave Established commenter

    No limits.

    The limit ONLY applies if you take the pension at your normal age of retirement (or if you have been given premature* retirement), so you are OK to take on any type of employment.

    *Premature is when your employer gives you 'full' retirement rather than the reduced one. This is normally where it is agreed because of redundancy
  5. djhappy

    djhappy New commenter

    Again, thank you diddydave. Helpful as well.
  6. cornflake

    cornflake Senior commenter

    Could you consider delaying retirement until Dec 2020?
  7. djhappy

    djhappy New commenter

    I have already resigned and my post has been filled, so delaying it is not an option. The key is that the house sale would have paid the mortgage and for a new property, but now from September I will have to find some way of paying the mortgage until things settle down. I know there is the muted "mortgage holiday" but there is no certainty about what strings may be attached to that.
    The only thing is that if I have to use my lump sum, I should be able to top it up once the house is sold.
  8. diddydave

    diddydave Established commenter

    Clearing the mortgage is probably the wisest investment for your lump sum but it does depend on the interest rate.

    I'm dubious about the mortgage 'holiday', whenever I've seen these schemes they all just say you don't have to pay £x this month but next month you have to pay £x PLUS the interest - to my mind they are more a benefit to the bank than they are the borrower.
    Prim likes this.
  9. eljefeb90

    eljefeb90 Senior commenter

    I used part of my lump sum to pay off my mortgage. I know it's a cliché, but it's always best to get rid of debt. Even with mortgage rates which are low, it is such a psychological release as well as a boost to the monthly bank balance.
    Also, there is the question of historically low savings rates and a jittery stock market.
    I am no financial analyst , but, whenever the current epidemic runs its course, there will not be a lot of spare cash about. I expect a lot of business owners and self employed will be trying to liquidise their assets , often in the form of property, and will be trying to sell in a crowded market. Then, unless someone in this government sees sense,which I doubt, we will have the disruption of Brexit in nine months' time.
    Not a good time to invest or move house, I would suggest.
  10. Braindead101

    Braindead101 New commenter

    It was my plan to sell the house to pay off the mortgage but after retiring in May, the house sale wasn't finalised until November. I was using my lump sum to pay the mortgage each month. In the end though, it wasn't a huge issue as the 6 months extra payments reduced the outstanding balance considerably so there was less mortgage to pay off.
    By the end I wasn't that far away financially than I had planned.
  11. Treacle3

    Treacle3 New commenter

    Well, they are a benefit to a mortgage holder who doesn't have any spare money and is short of cash atm. They are also of benefit to the bank too, as you say. If you can still afford to pay the mortgage without undue hardship, it's best to politely decline the bank's "offer".

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