To think my sister is being unreasonable

[frillyflower]

My sister has just been offered redundancy with a pension of around £1000 a month. She is early fifties and is divorced. Her kids are grown up and left home. She has no mortgage and no debts and she never really liked her job anyway - but she is terrified of living on a grand a month. I keep telling her it will be fine and nothing to worry about. AIBU?

Oh and her pension would be index linked.

There has to be a Plan B - if she's toying with the idea of redundancy then she should be looking for alternative jobs NOW and seeing what is out there.

I took early retirement in my fifties and have a monthly income quite a bit larger than £1000 per month. I do not have a mortgage but I don't live in London. I would not be able to fund my modest lifestyle on £1000, with one modest annual holiday.

You have to bear in mind that your sister won't be getting her state pension at 60 and will be getting next to nothing from any savings. I understand her hesitation. It is very difficult to find pt employment in your 50s.

It's your sister's decision, noone else can understand exactly how she feels about it.

I can understand your concern if you feel that her job is making her miserable anyway, but it's not your decision to make and you shouldn't be trying to persuade her either way.

She is not BU - YABU to think that it will be "fine" and that she has "nothing to worry about".

Of course once she is made redundant she doesn't have to live in London: she could be looking at either jobs or a cheaper way of life elsewhere. But I agree that it would seem a more sensible idea to stay in work and look for another job from that position unless she is literally on the verge of a breakdown.

"her pension would be index linked"

To what though? CPI, RPI, earnings? Is the pension private or public sector? Final salary or money-purchase? These questions are absolutely crucial. Your sister should absolutely not be making any decisions until she knows exactly what she will lose through taking her pension early - because she certainly will get less money in retirement as a result. This is a good place to start:

www.pensionsandannuities.co.uk/unlock_pension_FSA.pdf
www.redundancyhelp.co.uk/MonEarly.htm
www.direct.gov.uk/en/Pensionsandretirementplanning/PlanningForRetirement/DG_10014848

Public sector pension. final salary. thanks for links.

Well I think she'd be crazy to take early retirement. These are good schemes, and she stands to lose a lot in retirement, let alone losing a good salary for several years.

She needs to get the figures from HR to compare what she will get at normal retirement age to what she will get if she retires now. If she is in a union they may be able to help. Or she can get independent financial advice:
www.unbiased.co.uk/

This is a big decision which will cost her literally tens of thousands of pounds. Believe it or not, £1,000 a month is really not enough to live well on in London - even if you have no mortgage.

She may well be unhappy in her job, but I think her reluctance to chuck it in for the sake of a lump sum redundancy settlement and £1,000 a month is very sensible. I really do think she would regret it.

There's no way that at her age she can expect to walk into a new job which would give her anywhere near the terms and conditions she currently enjoys.

Yabu - it's none of your business.