To work part time

[Workinghardiam]

To reduce to 3 days per week and draw my deferred pensio. My monthly income stays roughly the same.

Should I do this at 55 or continue working to build my pension for my later years? For context. I enjoy my job, it's easy, relatively stress free, wfh most of the time, just not very challenging or exciting.

I'm torn between working full time longer then fully retiring or reducing hours now but working into state pension age.

I would approach it from the perspective of thinking about the quality of life. Do you have another project or an idea of what you want to do with your spare time?
If not, then I am not sure there is much utility in reducing hours in the job that you enjoy. I am in a similar position work wise and have a pretty good work-life balance. There is a side project I want to pick up and could do with 4 days a week but, otherwise, I am quite happy in my job and wouldn't reduce hours just for the sake of it.

Why not work but use your leave to do things as you enjoy? If I was you, I think I would stay working but have some extra special holidays with the money if you don’t need to save extra.

This is what I plan to do. I have an old pension that I can start taking at 57 with only minimal reduction in amount payable. I will then probably drop to 50/60% FTE and perhaps work another 5-10 years depending on other factors.

But it's up to your preference and depends on how reduced hours will affect the rest of your pension and how much you'll actually want/need to live on. Perhaps worth running some numbers and maybe getting some advice. Although if you're a Civil Servant, that might be easier said than done due to the current Capita fuck up.

Im doing exactly this at 55, dropping to 3 days and taking a defined benefit pension from a previous employer. Im sick of sitting at a desk most of the week and want to spend more time out being active. Ive done the maths. Plan to drop down to 2 days when mortage is paid off at 60. Will then work till 67. My reduced pensions plus state pension will be plenty. I dont want to end up like my dad... too much pension which accrues because he doesnt need it. I want to make the most of my remaining active years.

Can you do some calculations to work out the projected finances at different ages, eg: 55, 56,57 etc? You can look at how much your pension would be actuarily reduced by taking it early, offset by the fact that you will be receiving it for a longer period of time if taken early. You should be able to calculate the age point at which drawing it earlier will mean you’d ’lose out’ - you may find that’s quite old, so it may make a lot of sense to you to take it early. Particularly as the younger you are, the more likelihood of being fit and healthy and energised to enjoy more free time.

I am in a similar situation and am planning to drop to part time next year when I turn 58, and I will draw my occupational pension. Obviously it will be somewhat reduced because of taking it early but I’ve calculated that because I’ll get it for more years by taking it earlier, I’ll be into my late 70s before I would actually be disadvantaged by receiving less money overall. But I feel I’ll get more benefit by having the pension while still in my 50s. Plus of course at 67 when the state pension kicks in, I’ll have that too.

the key thing it’s shown me is how very beneficial it is to work full time for most of your working life, as that really makes your pension stack up and then when you get to your 50s and want to slow down a little, it’s very doable to reduce hours without being disadvantaged. I did a couple of years part time when my babies were small but went back up to full time pretty quickly which has definitely been the best thing to do.

@cattussuperior I wish I'd have thought about my pension when I reduced my hours after having kids. I took a couple of years out when I had them, then went back part time for 10 years before starting full time again a few years ago. Of course my husbands pension is huge compared to mine even though we were similar salary before my income reduced with kids.

@ReverseFerret both my parents were too ill/infirm to enjoy their retirement. That's why I'm thinking if I reduce my hours early I can do more of what I enjoy and also look after my fitness for longer term health, rather than being sat at a desk all day, every day.

I’m fortunate that my father was very wise about pensions and gave me good advice about compound interest from a young age. I wouldn’t have wanted to work full time when my babies were really little so I reduced to part time (was careful not to give up work completely) but then stepped back up to full time within a couple of years. It was the best decision ever. We have a good pension scheme where I work but I’ve seen too many colleagues end up on part time work, sometimes never returning to full time after maternity leaves, and those of a similar age to me are now realising that part time work = part time pension.

I do think you’re right though to really consider drawing yours early if it’s a decent amount. As suggested, do some projections as to what it would be if you draw at age 55,56 etc and then you’re armed with knowledge about the best point to take it.

As someone who works in pensions (IT side now but I used to work in operations) I would always advise not to take partial. All we used to have is people complaining that they are still working and using their pension so the worst of both worlds.

But partial retirement is pretty much a no brainer in some schemes where people want to work part time. Just because some people don't seem to understand what they've chosen to do, in possibly a different type of scheme, ie DC instead of DB, that's not a reason for the OP not to do it.

@Bjorkdiditi agree, if you weigh things up carefully and do some calculated projections of how it will impact you, then it can make sense.

that’s my situation. I have worked full time for the majority of my career, pre-children and then again when they got to around age 2/3. I’m now in my 50s and tbh I want to slow down a bit. I haven’t got the energy I had in my 30s and 40s. I’ve calculated that if I drop to say, 2.5 or 3 days a week and draw my pension, although my pension will be reduced because I’m taking it a bit earlier, I will be getting it for more years overall rather than if I took it later and overall it seems a sensible decision. I will have some free days during the week without dropping my income as I’ll get my pension to top up my part time earnings. It’s going to be more useful to me getting that in my late 50s when I’m fit and healthy than leaving it until I’m perhaps not in such good health. To be honest, this is the first time in my life since my babies were really small that I’ve felt the need to go part time. Like I say; in my 30s and 40s I had bags of energy. Working part time back then would have not only severely impacted my pension but I would also have been somewhat limited in how I could use my free days if I had been part time because any activity I did would have had to fit round their school day. Whereas now, the kids have flown the nest and the world is my oyster!