Would you go part time in my position

[bitofadilemma22]

Have name changed as I've included a lot of detail. Am thinking of going down to 4 days a week from a full time high pressure professional role. Am 53 and feel like I just can't do it full time any more. My main concern is that it might compromise my plan to retire at 60. Here are my circumstances:

FT salary of £65.5k
£95K left on mortgage which I'll be able to pay off fully from mine and husband's savings in 5 years
Joint household outgoings of around £1600 which we split 50/50
Mortgage pot ok-ish but need to work on it in the next few years - my plan is to put all of my annual bonus (usually around 10% of salary) into bonus pot every year, which I haven't been doing to date
Support my child (not partner's) at uni with around £250 per month and expect to do so for the next 3 years

Partner earns similar to me but plans to continue working FT.

WWYD in my position?

Well due to higher rate tax, you’ll get 84% of your pay for 80% of the hours - or thereabouts. So that’s a small plus.

The first consideration isn’t money, I think - it’s whether working 4 days will meeting your aim.
Would you end up working on your day off?
Or extra hours on your working days?
Or even the same hours but be under pressure (from work or yourself) to deliver the same output?

I don’t understand you “bonus pot” comment? At £65K, the best place for that bonus in terms of tax efficiency is straight into your pension. But are you approaching lifetime allowance?

If sounds like you really want this, so I’d stop thinking of it in terms of 4 days or retire at 60. Instead, calculate: how can I do both?
That might be lower spending now, it might be accepting a smaller pension at 60. It might be downsizing.

With £140K ish household income and only a £95K mortgage, are you sure you can’t make both work?

Would your husband be on board with one super frugal year? Save as much as you can, with all your 5th wages going against the mortgage, then make the decision at the end of the year to drop a day? Working that extra might be more bearable if you know it is very directly going into “buying” your drop in hours.

I reckon you can do both though, if you adjust your retirement income decision.

Well adding your bonus to the pension pot (around 18% of gross salary) will more than offset the reduction in contributions from reduced hours so your plan to retire at 60 won't be compromised. Have you done the maths to work out if you will have enough to maintain whatever lifestyle you seek for maybe 30 years?

If you have savings now - why not pay off your mortgage now or are you planning to overpay for next 5 years rather than save?

I made the decision to cut my hours a few years ago and just accepted that I might have to work a bit longer on the basis that I would rather have extra leisure time now.

And could you also work compressed hours over 4 days so that your pay reduction is less? So maybe 36 hours over 4 days?

I read it that the plan is for the bonus to go into the mortgage and is part of the 5 year plan to pay off the mortgage.
I suspect the numbers stack up better to put it into pension though.

I don’t understand you “bonus pot” comment? At £65K, the best place for that bonus in terms of tax efficiency is straight into your pension. But are you approaching lifetime allowance?

Sorry, I meant I'd put my bonus into my pension pot every year to try and make up some of the pension shortfall.

If you have savings now - why not pay off your mortgage now or are you planning to overpay for next 5 years rather than save?

We don't have enough savings to pay it off now. But at the end of our next fixed 5 year term we will have.

As @Testina mentions, working part time is not necessarily less stressful. I have worked part time in the past but feel less stressed working full time with no DC at home.

What does your pension pot look like at the moment? What would happen if one of you developed a serious illness and couldn’t work, died or was made redundant? You still have 14 years to go until you can claim your state pension.

Thanks for the replies so far. Have thought carefully about whether or not I'd be expected to do the same amount of work but we are due to get additional support in the team so I think there would be someone to share the load with.

My pension pot looks fairly healthy according to a financial advisor I saw recently, as long as I continue to pay into it between now and retirement. And I think that putting in my bonus payments is more than going to make up any shortfall between full time and part time pension contributions.

OP could you consider compressed hours? 4 slightly longer days and a day off? Then you would still be full time but have the extra rest day

No I haven't because I don't really want to do long days. I want to cut my hours.

If you are getting more support in the team can you make that a "fresh start" where you delegate more, stop working loads of additional hours and take the pressure off yourself?

How much is in your pension pot?

60 is early to retire with today’s life expectancy, if that is your key aim then only by knowing how much is in there now can anyone tell you whether you should stay full time & pay more money into it.

Yes I would go down to 4 days in your position. You won’t lose the whole 20% of your pay because of tax and you have a plan to pay off your mortgage relatively soon. If you get to 60 and can’t quite retire you could drop hours further for a couple of years, but hopefully you’ll still have enough.

I have a similar situation and one of my conclusions was that I prefer to work a couple of years longer at 80 per cent rather than carry on as I was for a good few more years, which did not seem tenable.

Thanks for all of the advice - I've mulled it over and decided to make the request at work today. 🙂

Good for you.

I was going to suggest not compressed hours but slightly increasing your hours e.g. if you work 7. 5 hours going up to 8 hours is not that much.

Consider what day to have as NWD, I had Wednesday as really breaks the week up. It also allows you to start building your retirement schedule so you can work out what you want to do when you retire.

Consider having a timeline to potentially go to 3 days at say age 57.

Remember you can overpay on your mortgage at any time and it reduces the total you pay in interest.

As pp say, the bit of salary you give up is the one that has the most deductions.

Do it! Life is too short. I only work 30 hours and it's great. I get a day to potter/shopping/housework etc.

Would your employer actually remove 1/5th of your workload or would be expected to do your current job in 4 days?

I wonder whether you can buy in anything to help make life easier? I don't think it's a good idea to go part-time when the cost of living is shooting up.

Good for you. I hope it works out. No point working full time unless you absolutely have to. Life’s too short.

I already have a cleaner. I've done my sums, I can afford it. Of course I wouldn't consider it if it was going to stretch my finances too far.

What would I do? I’d do what you’re planning to do. It makes more sense than burning yourself out and then leaving or getting a lot less paid role that’s supposed to be less stressful.

For those of you who are interested, my work request got approved this week and I start my new hours after Christmas. Can't wait to have a day to myself every week.

@bitofadilemma22 great outcome.

Great news! Enjoy your extra day

Good on you. I'm looking to go down to 4 days from 5. My job is very stressful also and I feel drained all the time. Looking at dropping the day in September next year.