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Pension Conundrum - Any Ideas?

Discussion in 'Retirement' started by PeterQuint, Jul 27, 2019.

  1. PeterQuint

    PeterQuint Lead commenter

    Okay, based on experience of watching the books carefully over the past few years, I've figured out that Mrs Q and I can survive comfortably on a disposable income of £750 a month; that's the amount left after we've paid the bills, bought the food, saved for holidays, and so on. Indeed, we probably don't need that much, but that's the figure we need to ensure there's not a problem.

    I've also spent a lot of time figuring out what our bills will be after we retire, what will go up, what will go down, and so on.

    We intend to retire at 60 on our teacher/workplace pensions, which will be supplemented by our state pensions when we hit 67.

    Here's the conundrum. Having crunched the figures, I've figured out that we'll have a disposable pension from age 67 to...well, to death, of almost £1,200 a month. That's far more than necessary, and the extra will be very welcome.

    But on the downside, between 60 & 67 we'll only have a disposable income of £350 a month. Now, this might be enough. It's on the lower side of what I think we might be able to survive on, but then again it might not be enough.

    Any tips? I suppose what we effectively need to do is to 'borrow' the shortfall from our post-67 selves. It's not that we're not going to have enough money, just that a lot of it will come at the wrong time.

    By the way, changing the pension/lump sum balance is a non-starter, as is changing the date at which we take the pensions.
  2. lindenlea

    lindenlea Star commenter

    Friends of mine do part time work - invigilating, drugs deliveries for the doctors, admin jobs, driving for a coach company, having b and b guests, keeping bees and selling honey, or there's tutoring or supply. It might help for a year or so.
    You do seem so intent on absolutely nailing this down. Do you have capital to keep you as comfortable as you'd like.
    phlogiston, eljefeb90 and PeterQuint like this.
  3. Prim

    Prim Occasional commenter

    What about securing a teaching post in a new school for a couple of years to increase your pension? Do you have any savings to supplement this? Only a suggestion as the last thing you should be doing in retirement is struggling. I know most of us want to get out asap but you also need to secure your financial future. 7 years is a long time to watch the pennies and you may not survive (sorry) that long :(
    phlogiston and PeterQuint like this.
  4. PeterQuint

    PeterQuint Lead commenter


    Part time work is certainly the backstop, and not so bad. £400 a month is £200 a month each, or £2,400 a year each. Even on a pretty basic supply rate that's only 24 day's supply a year.

    Working a little longer is also a possibility. An extra year working once everything is paid off is 12 months' of saving, and we could make a very big hole indeed in that shortfall.

    We have a house which we intend to downsize at some point between 60 and 67, but we won't be able to do this straight away. Probably at 63 or 64 at the earliest.

    It is quite maddening, knowing we'll have more than enough in just a few years time. And yes, I don't want to scrimp and save for 7 years if I end up not having long left afterwards, nor work long into that time.
  5. grumbleweed

    grumbleweed Star commenter

    I'm in a similar position in that I'm. Looking to go early and my pension is very small if I take it early.
    Basically I've been saving like mad since we paid off the mortgage so that my savings can supplement my smaller pension for the years before I reach 67. A few of my friends had enough to buy a holiday home to get rental income to help, I don't have that sort of money.
    So we've had to really think when can I go? If we didn't have any savings, then I wouldn't even be thinking about it, I'd just have to keep working.
    It's a tough decision but in my case Mr GW is 15 years older than me so if we want some retirement time together I'll have to go pretty soon. You never know what's around the corner and I don't want to look back and regret not retiring sooner. It's surprising how much less you can live on if you need to.
    PeterQuint likes this.
  6. catmother

    catmother Star commenter

    I'm confused @PeterQuint . I thought you had it all figured out,with taking your teaching pension soon and starting your new non teaching job in September?
  7. ikon66

    ikon66 Occasional commenter

    I’m not sure either, you say all bills paid food and holidays etc. Why do you need £750 disposable, what will that be spent on, nights out etc??. Surely you knew what income you needed before thinking about retiring did you not take that into account initially?
  8. PeterQuint

    PeterQuint Lead commenter

  9. MrMedia

    MrMedia Star commenter

    You will have your lump sum and savings. So presumably you can draw down on this at an accelerated rate and combine this with a decelerated rate over the following 7 years. So I would look at a draw down needed for a 14 year period to deliver the disposable income and then combine the two draw down rates to deliver an overall balance.
    MrSaturday and PeterQuint like this.
  10. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Are you still paying off a mortgage? If so that's probably the largest single outgoing so paying it off before you retire would make an enormous difference to your income -v- expenditure calculation. Either with a pension limp sum or working a couple more years if its term is nearly up. Might be an impractical or irrelevant matter, but thought I'd ask.
    PeterQuint likes this.
  11. catmother

    catmother Star commenter

    No,you have not given up teaching and are planning to take your pension? No,you have not got a non teaching job stating in September? I thought you had another thread dedicated to this?
  12. eljefeb90

    eljefeb90 Senior commenter

    How are you planning to spend your time in retirement? As @lindenlea says, the economy is buoyant and there are lots of jobs out there. I have accrued nine casual/ part time jobs which rarely impinge on my hobbies and holidays .I had been planning to dip into my AVCs prior to retirement to tide me over the long nine years between early retirement and state pension age. I reckon I can keep these jobs going for another 5 years or longer should I choose to. Last year I made over £9000 gross. I had never planned to work after retirement. My only plan was to escape from a toxic work environment. The pension is the bottom line, there are plenty of ways to add to it.
    alfredrussell and PeterQuint like this.
  13. PeterQuint

    PeterQuint Lead commenter

    In the mortgage/lump sum thing, I’m drawing maximum lump sum to pay off the mortgage (and not having that to pay has been taken into account).

    This doesn’t have a massive impact in my pension, only around £50 after tax.

    Yes, I start my non-teaching job in September, and start taking my pension next spring.
  14. PeterQuint

    PeterQuint Lead commenter

    Many thanks, yes I’ve seen your posts on extra work, and was hoping you’d join in.

    As I say, we only need £400 or so a month, which is £200 each. Of course, if we can get more than that, say twice as much, we can save half and only work for just over three years of the seven between retirement and state pension.

    Nine jobs! I know you do exam invigilation. Anything else worth thinking about?
  15. PeterQuint

    PeterQuint Lead commenter

    I’m not retiring from my teaching job, I’ve been made redundant.
  16. FrankWolley

    FrankWolley Star commenter

    Exam marking each summer?
    PeterQuint likes this.
  17. eljefeb90

    eljefeb90 Senior commenter

    Nine jobs does sound a bit excessive but several of those take up only a few days per year. I work for the British Council and they are contracted to conduct professional exams, especially accountancy and finance, so I have three separate contracts with them. I work for a local university. I am invigilating their resits all next week, for instance. I also work on the electoral roll and elections for my local council and occasionally put in a shift or two at a local theatre.
    It gets busy in May and June but the work is surprisingly regular. All the work is casual so I have to confirm my availability. Pay is between £9 -£15 an hour.
    A calendar is essential!
    PeterQuint likes this.
  18. eljefeb90

    eljefeb90 Senior commenter

    Perhaps I am biased, but I kicked exam marking into touch after one year. I found that my hourly rate worked out as similar to invigilating..perhaps I was a slow marker...but the level of intense concentration and sheer drudgery and bureaucracy of it was a major turn off. I would rather be invigilating, letting my mind wander off to a happy place.
    PeterQuint and Prim like this.
  19. Prim

    Prim Occasional commenter

    You could also look to do supply directly with a school. If they know you are reliable they will use you plus the pay will be much better than going through an agency. Not sure of your subject but there is also the opportunity for consultancy work?
    eljefeb90 and FrankWolley like this.
  20. FrankWolley

    FrankWolley Star commenter

    Indeed. But if hard up, one could perhaps do both (working long hours for a few weeks).
    PeterQuint likes this.

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