If you were guaranteed 1,200 a month income…

I'd want to be clear that the £1200 was going to be as low key as you're making it sound.

And do a thorough budget (real expenditure, not guesses) to make sure you really can live on the trust plus 700 or so.

If you have a full time income plus the trust, but only £10k in savings, it suggests your bills and expenses are quite high.

Part-time jobs that are on set days, not zero hours, with management that doesn't micromanage or go on power trips are very, very rare.

Have you thought about the consequences for your pension?

This. Part time jobs are not necessarily all that easy to come by; there is a lot of demand

The thing is when your mortgage is up for renewal what if your preferred lender won’t give you a mortgage due to your low income?

Regardless of your trust they won’t lend based on 1200

I think you're underestimating how much that 'technical' decrease in value will bite. While obviously it will always be good to have that guaranteed income it will be a less and less significant contribution to your bills over time, so becoming reliant on it seems really dangerous.

Are you sure that it’s not just the company that you are working in that is causing the issues ( unfair workload / toxic atmosphere) and if you tried changing companies ( still work FT) that your MH would improve.

I personally couldn’t survive on so little money and the lack of money would cause me so much stress that it wouldn’t be good for my MH

But this is something that unfortunately only you can decide

But she'd have to have enough qualifying years of contributions to get full state pension, which would depend on how part-time the new role was and how long she envisages doing this for.

The priority is to get well, but I'd put a time limit on how long you stay in that position.
£10k savings is great, but without extremely good insurance coverage, could be wiped out quickly as a homeowner/car owner etc.

I hope you have a career you can pick back up after recovery; or that you can get back to a decent income eventually.

Look after yourself, OP 💐.

As a single parent, I wouldn't. If you were a single adult and weren't concerned about pension, I'd say do what you want. But with a child to provide for, I think you need more than that.

But there are lots of ideas upthread. It doesn't need to be a binary choice between p/t minimum wage and what you currently do. If you can hang on to what you do at the moment (unless you really are nearing burn out) you would have time to search for another industry that suited you better. Perhaps part-time hours will be best, especially if your child is quite young, but that doesn't mean having to go right down to the bottom of the career ladder (which is also hard work, in a different way).

I don't think you're crazy, but before you jump ship, think about how you'll feel with an income that gives you very little room for manoeuvre, and no safety net. I brought up my daughters as a single parent, on a very low income when they were younger but a more comfortable one when they were teenagers, and I valued the flexibility and the freedom from worrying that a slightly higher income brings. Knowing you're only covering the basic essentials and worrying about unexpected bills is stressful (I remember a couple of times getting into a complete state when my daughters needed dental work which needed paying for immediately, and having to constantly say no when they ask for things can get dispiriting). If you have no additional income you're going to be very restricted in what you and your DC can do, and that might cause some problems as they start wanting to be more independent and need the resources to do things on their own.

As others have said, is a part-time job, possibly on a low income doing something not very challenging, possible for you?

EDITED TO ADD - I just re-read your OP and see that you're planning to do exactly as I said, and get an undemanding part-time job. I think that's a good plan. Your health and happiness matter, and so long as you're above not just the breadline but the anxiety line (which isn't in the same place for everyone, so think about where yours is) you should be fine.

It won't be 1200 plus state pension, though. Not in real terms.

Life is great but I do worry about my pension. Then again 1200 plus state pension would be plenty

I did this but found a happy medium where 3 days a week pays 27k. I have found now I do fewer hours I enjoy it again and will go up to 4 days next year

I would use the guaranteed income to pay mortgage and council tax and find a part-time job to complement it.

Having time and freedom and being able to improve your mental and physical health are important.

Some people are so driven and blinded by the endless treadmill of always trying to bring in more money that they seem to forget that....

So 700 a month is only barely minimum wage. There must be less stressful things you can do that are better paid than that, if you've currently got a well paid career.
What are your qualifications? You could retrain using your 1200 to prop you up for a year or 3?

I'd say make this a temporary plan only, while you recover

I think you should consider investing the £1200 each month into a fund that will grow.
Address the stress issue separately.

With this trust, are you able to claim UC if you reduce your working income or would you not qualify for help?

I have done similar to this - It got to a point where I could not bring myself to go into work, I had issues with the kids, i was getting more and more depressed and literally could not cope anymore. It was back in the day of tax credits. I reduced my hours down to 20 hours a week as a self employed cleaner and claimed the tax credits. As long as I had enough to cover the bills and put food on the table and clothes on their back, I was happy. You also have savings as a back up.

I did this for about 3 years until the kids were older and more self sufficient. It gave me the break and the freedom I had been craving, but I could also dictate when and how many hours I worked. I then found I was ready to go back into full time employment.

You need to do whats best for you. I went from not being able to get out of bed to being the first one up, organising my day, advertising my business and growing my own clientele.

Good luck

Unfortunately, ‘unskilled’ jobs are quite hard to find right now, and those on offer are often zero hours contracts. It may also cause a problem when you need to remortgage.

Do you have any niche skills or transferable skills that could be useful in a different environment? Would you be open to studying for a year in order to retrain?

If you can afford it, I would have a week off somewhere really relaxing, where you can give yourself the space to think about your options.

Its a long time since I have dabbled in trusts work but even a trust can lose money/see the value of investments erode

25 years of inflation to retirement age. And will you also be relying on this income for retirement or do you also have a pension? Because that's another 20 years of inflation.

Looking at past inflation as a guide, that £1200 will be worth around £640 by the time you retire, and under £300 by the time you reach average life expectancy.

A step down is better than burnout and crashing, so it sounds as if your plan may be a necessary short term step. But for a year or 2.while you recuperate, re-evaluate and maybe re-train. It doesn't sound as if you can afford to make it a permanent change.

I just don't see how it will work... My mortgage and bill come to £1100 so only £200 more than yours but I have no dependents. I have no debts, no loans, nothing. I take home £2700 a month and this is just abut enough to have an average quality of life (gym membership, two cheap holidays a year and some hobbies) while saving a little bit every month. Technically, I could do it on 2k as a single person if I cut everything down to the bone but I am not convinced it would do my mental health any favours.

Get a part time job first BEFORE handing in your notice. Good luck. Look on company websites. Tesco etc.