Retiring unexpectedly and worried financially

[BundleOfLaptops]

Hi

Has anyone here retired suddenly and unexpectedly?

I have suddenly retired through ill health. Not really my choice (my employer pushed it) but I can see it's the right thing. I will not be able to work elsewhere (condition of ill health retirement).

And I still have a mortgage. And school age kids for another 10 years.

I can just about make the sums work but it'll be tight. With potentially a lot of life ahead of me. I'm worried there'll be no fun just paying the essentials.

Has anyone been in a similar situation ? I feel very unusual in still having the mortgage (about £150k) and kids at home. Which scares me.

I don't understand how that can be legal, or desirable, or beneficial to anyone. Surely your human rights would be infringed. And how would the pension payer find out you were working? Or enforce it? Anyone disclosing info about you would be breaching GDPR.

Are you reading a different thread? It’s not that she can’t find a job.

It’s similar to how you can’t work for one company while claiming statutory sick pay, it’s fraud.

Are you allowed to declare any earnings? Passive income? Do you have control over what your pension is invested in?

Are you not ever allowed to volunteer? What about being a paid foster carer?

What is MSE? Thanks

To be really clear - this is not a "how do I earn more money" thread.

It's a perfectly common pension arrangement for DB company pension ill health rules.

I'll just have a lot less money than I'm used to - with no advance notice. That's a worry.

People telling you to turn it down and try to find another job likely don't have lived experience of this. You'd be mad to turn the pension down just to try and make another job work, because if you're health doesn't allow you to remain in that job you could end up way worse off as you likely wouldn't have an equivalent benefit in the new job. No way I'd risk that with kids and a mortgage to pay when you're already struggling health wise. Chances are you'd not make it through the occupational health screening either sadly.

Niche question, but is it technically a pension, or is it a permanent health insurance benefit provided by your old employer? That makes a difference in terms of some additional entitlements.

Most people posting do not seem to understand the lower tier/upper tier difference in your IHR award. Some clearly can not even read.

OP I feel for you, it's an adjustment but no, obviously you can't work. I'd use this time, the first chapter, to take time adjust and to focus on your wellbeing. Whatever that looks like for you.

The second chapter, lodger! Overpay your mortgage for X number of years using income from a lodger.

For those asking. MSE is Money Saving Expert site and forums. Fantastic resource.

Also could you use the mortgage charter to perhaps extend the term on your mortgage to bring costs down, and then downsize once the kids leave home? Or take a mortgage holiday to build a bit of a cash buffer while you adjust?

The age your kids are you could move to somewhere else to remove need for such a large mortgage, one thing you could look at is part ownership and part rental which is not as expensive as it sounds, the rental part is also eligible for housing benefits. There are then also grants available for improvements and so on if necessary. This could be an opportunity to move somewhere with good accessibility and well located for services. Whilst children may not like moving long term they will adjust.

So to be clear you will have enough to live off but money will be tight?

It sounds like you have no option but to accept the pension due to ill health and focus on staying as healthy as possible. That doesn't take a load of money.

Hopefully not working will mean less stress. Getting into a new routine will help.

We retired early initially on lowish pensions but gradually as more have paid out our income has improved. I would suggest you look at things like walking, reading (through library), discounted theatre tickets, national trust etc etc.

I don't think we can really help you without more details. If you detailed your income and expenditure maybe we could help but the question is a bit too broad I'm afraid.

Sorry, I clearly totally misunderstood the issue.

"I don't think we can really help you without more details. If you detailed your income and expenditure maybe we could help but the question is a bit too broad I'm afraid."

No it's not. You've just read the question wrong.

Is the lump sum enough to pay your mortgage off?

If you can't increase your income can you reduce your outgoings? Can you get a lodger etc? Downsize, move to a cheaper area, sell something? If money is going to be tight, do you have a buffer? What happens if you have an unexpected expense? I feel you should do something for some income as you're putting yourself at huge risk, it sounds like you're retiring about 20 years earlier than planned? That's a big expense to fund.

OP has already said she can’t take a lodger as she still has young children at home.
She can’t take any kind of job as she will lose her ill health pension
OP if you have no option but to take the retirement then I think you should repost asking for budgeting help. Even shaving £100 from your monthly expenses would make a difference.

This happened to a friend of mine op. Have a look and see if you are entitled to any UC - she has been eligible as she gets DLA and has a child so it could be an option. My friend still has a mortgage as well.

Agree with others about seeing what benefits you are entitled to.

It’s a long shot, but could you speak to your ex about paying over the cms amount to help with more of the child-related costs?

Really sorry you find yourself in this situation. You’ll adjust and it will get easier though.

Hi OP,
This sounds like a rotten ride. It's not the same of course but I did cut my salary in half to change from commercial to charity sector and have lived for 10 years in that more modest way. But I am now finding myself sick of never being able to afford luxuries and money stress and looking much more strategically at how to climb the ladder in the sector.

It's certainly possible to adjust to lower income circumstances, it just sucks a bit but you'll find your way and obviously as an auditor you'll be great with money management and sensible approach to risk etc. Lots of people take big life adjustments through relationship splits where the money suddenly funds 2 homes, or businesses that collapse etc. Though its less common for this early medical retirement you will be far from alone.

I think the main financial thing I benefitted from- and I don't know how you feel about this, or your family situation or personal savings etc - is I have had the security that if I had a big unexpected outlay (which has happened for my car and boiler), my parents have very kindly lent me the money and i have paid it back either with no or very low interest. Having that cushion has been a big comfort because, though I've never had to 'default', if I had a tight month they'd be fine with me missing a month, and I've not had to worry about credit card debt. Now I know lots of people don't have parents in a position to help, or would never dream of using parental help like this, but for us it has worked really well for us and they've known chiefly it's helped me not stress about money. I am very open about my income to them and I've always been good on my word over 20 years (they've helped with things like rent deposits etc). So if you could potentially have any 'back up' from your parents, or similar, I'd recommend having the conversation and it might help take the worry away for you a bit?

All the best!

I think this is worth considering if you phrase it in terms of not being able to afford the extras for them unless he helps.

I hope you will have a long life despite your health problems. In which case, make sure you are getting NI credits towards your state pension through your child benefit. (I don't know if you have to claim them in some way.) You can also get NI credits by claiming ESA, although your pension will be taken into account so you likely wouldn't get any/much money, just the credits.

Your pension will go a little bit further than an equivalent salary would, because you will not have to pay National Insurance.

Not been in your situation, but my Mum retired at a very slightly older age than you due to ill health. I wasn't privy to all the money concerns at the time, but I know that it took some adjustment on her part to change her life, so quickly.

It was partly needing additional practical help from us kids, which we were quite happy with, though we were pretty independent kids anyway and this was the 70s so we also worked and got pocket money that way.

For mum it was also building a day time social network when those of her own age were still working. She did a lot of inviting friends over to her for a cup of tea, but she would spend most of every afternoon in bed anyway.

Hi OP, exactly the same thing happened to me earlier this year. It’s a shock to the system and I was really quite sad at losing my career and having it confirmed that I was too ill to work. Take some time to be kind to yourself and process this. Apart from that, all I can advise is all the general frugal budgeting tips, buy yellow sticker food/visit community pantries, batch cook (saves your energy as well as energy costs), use slow cooker & airfryer. Sell unwanted stuff. I’ve started trying to grow my own, I’m not sure if you are able to do this but you could give it a try. I have to be honest there are expenses involved in this eg buying plant plugs/seeds, compost etc and this year the return hasn’t been great due to weather and not a lot of knowledge but hopefully it will pay off and it occupies my now rather bored mind. Apart from bills I find I don’t actually spend much, no clothes, petrol, contributions to work collections but I realise you have young children who cost more. Research charities, grants, school funds etc. It’s tough, it’s a shock but you are well placed to manage your new budget and lifestyle. Good luck.

Hi OP

I'm in the process of applying for IHR, similar age and life circumstances to you, apart from the fact I'm not a single mum (these days)

I guess we differ because I'm actively pursuing IHR, but only because if I don't I will likely lose my job due to my health declining anyway. My DC are autistic so there's an added layer of me needing to be well enough to care for them and one of the plates I was spinning had to drop (work)

No advice, but solidarity ❤️