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Early retirment at 55

Discussion in 'Retirement' started by breadmaker, Sep 16, 2019.

  1. breadmaker

    breadmaker New commenter

    Hi, probably a very similar story to many others. Gone back 2/3 weeks ago, new Leadership team, many staff made redundant in July to save money, so am finding already that my job as a primary class teacher now encompasses many, many other aspects of the jobs which have been axed, so I have decided to retire early.

    My question is, if I give my notice in Oct for the end of December- resign not retire- from school, can I then ask T Pension for my [pension to begin from January 27th once I have used up my December pay?

    If I resign, do the school need to know that I am intending to retire because I will not be taking my pension until after I have left their employ.

    Thanks for any replies.
    SteveWoodhouse likes this.
  2. Prim

    Prim Occasional commenter

    My understanding is that you can resign provided you give the correct notice. Up to yoiu when you want to access your pension. Nobody can stop you.

    So sorry to hear of what sounds like inadequate management of staff and a lack of understanding of how to educate pupils :( I despair.
    Startedin82 and phlogiston like this.
  3. breadmaker

    breadmaker New commenter

    Thank you Prim.
  4. phatsals

    phatsals Senior commenter

    No, once you've resigned it's entirely up to you when you retire. No need to ask for permission, just fill in the online forms and off you go. You decide the date you want your pension to start from, it will be paid to you the day before your birthday and your first month will be pro rata.
    Startedin82 likes this.
  5. breadmaker

    breadmaker New commenter

    Thank you. This is all very encouraging as I give thanks that my D.O.B. allows me to even be considering this as an exit option!
  6. Sundaytrekker

    Sundaytrekker Star commenter

    If you are taking your pension to begin from January 27th then, as it is paid in arrears and presuming this is your birthday date, your first payment will be February 26th. So your December pay will need to last a month longer.
    Startedin82 likes this.
  7. diddydave

    diddydave Established commenter

    You can ask for any date where you are no longer in pensionable employment - so yes that's fine.

    Your school does not need to know..but...check NOW that you have a full employment record on the TPS website as it's far easier to get things put right whilst you can badger your employer.

    You will get your lump sum on the date you ask for retirement to begin and then the monthly payments begin the day before your birthday each month from that point thereafter (so as Sundaytrekker says, the 26th Feb if the 27th itself is your birthday.)

    Have you considered the tax benefits to be gained by delaying your pension until April?
  8. breadmaker

    breadmaker New commenter

    Thanks Diddydave.
    In truth, I have had this in my head for a while and so did check out my pension last year. Found a whole missing year of service as a full time AHT so a very worthwhile exercise! My total pension would put me under the tax threshold so I assume any tax breaks would be irrelevant in my case, but thank you for going into detail and bringing it to my attention.
    Startedin82 likes this.
  9. SteveWoodhouse

    SteveWoodhouse Occasional commenter

    Are you sure you can live on less than £12.5k a year for the rest of your life, or at least until you’re 67?
    Startedin82 likes this.
  10. SteveWoodhouse

    SteveWoodhouse Occasional commenter

  11. FrankWolley

    FrankWolley Star commenter

    We're living very nicely on not much more since I retired 6 years ago at 56...Depends on your circumstances (e.g. we had no mortgage)
  12. catmother

    catmother Star commenter

    Plenty people do.
    PeterQuint likes this.
  13. lemonmuffin

    lemonmuffin New commenter

    Once you have resigned you will begin to feel a new sense of freedom. Whilst it’s not the best way to end your teaching career (that sense of being forced out) I can assure you that you are in good company. Anyone over 50 needs to be alert, we are not valued. I agree with others on this forum and in threads elsewhere, once you have retired your expenses are less, you can cook from scratch for example and may need your car less if at all. Circumstances vary enormously but clearing mortgage and any other debt, if you can, seems like a good idea, again loads of pertinent advice to be found if you search threads on here. Really hope that you can enjoy your final term of teaching, count down the days and enjoy the aspects of teaching that made you want to teach in the first place.
    eljefeb90 and littlestrebel like this.
  14. diddydave

    diddydave Established commenter

    Actually this means it would probably be MORE worthwhile looking into.
    If you are under the threshold it means you have 'spare' capacity to take income tax-free in your pension years.
    I'll give an example.
    Suppose you are expecting to be £1000 under the threshold in your pension years.
    Note that you get 25% tax-free on withdrawals from your pension fund.
    This means you can withdraw £1333 (£333 is the 25% and the £1000 uses your 'spare' tax-free allowance)
    Tax bill = £0

    So for each year you want to do this you need to put in £1333 now.
    This is where you are being tax-efficient as you are moving money from this year, where it would be taxed, to future years, where it might not be taxed.
    If you are a basic rate tax payer then moving £1333 into a pension fund 'costs' you £1066.40 (the missing £266.60 would have been taken in tax)
    If you are a higher rate tax payer then moving £1333 into a pension fund 'costs' you £799.80.
    Startedin82 and Prim like this.
  15. ikon66

    ikon66 Occasional commenter

    Also, they may be taking big lump sum to reduce annuity to under 12.5k so will have that to live off too??
  16. PeterQuint

    PeterQuint Lead commenter

    Yup, I intend to, too (well, me and the other half £12k each).

    I just thought it was a question worth asking.
  17. breadmaker

    breadmaker New commenter

    Thanks to everyone who has taken the time and trouble to reply. Too much marking and planning to get back to you in the week!
    I am lucky not just because of my D.O.B. but because my husband will still be earning, loves his job and if things stay the same, they will have to force him to retire at 67!
    Best wishes to everyone.
    Startedin82 and PeterQuint like this.
  18. Niges123

    Niges123 New commenter

    I went at 55 with just over the annual pension tax hurdle of 12.5k. I used my lump to clear my mortgage. Bits of jobs here and there put some beer tokens in my pocket and I couldn’t be happier. You simple adjust your lifestyle to suit. Blood pressure down, looking years younger (so folk say) and living the dream. My advice is do it I have no regrets at all. I used to dread Sunday nights but now they’re my favourite night of the week
  19. Startedin82

    Startedin82 Established commenter

    Fully sympathise that you are finding your job intolerable now.

    However the problem with going at 55 is that you do lose a fair bit of pension and lump sum. Also given your stated age you won't be a protected member of TPS (you had to be born before April 1962 for that) so that has implications as well. I'm sure you've looked into it all.

    Your husband's income will probably mean that your circumstances will be fine but have you considered alternative work - part time to top up?
  20. PeterQuint

    PeterQuint Lead commenter

    Something struck me. If you’re taking early retirement your school can hold it up for a maximum of six months.

    But how, exactly? Refuse to fill in paperwork confirming details are correct?

    If the OP is still working there when s/he applies, can they still do this?

    Unless it’s clear how the six month delay works - what the school have to do or not do - I’m not convinced we can be so sure.

    Having said that, I don’t know why they’d want to. But who knows?

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