Would you take voluntary redundancy at 60 in these circumstances?

[Anytimelikenow]

Voluntary redundancy at 60?

I have been offered voluntary redundancy. Payout will be about 32k, I think, a year’s salary.

I am unlikely to ever find another job. My industry is dead in the water and I just don’t have the energy or willpower for applications and interviews. I’ve done this job for 30 years and I’m out of touch. I also have stage 4 cancer but I am well and you wouldn’t know. I do not know my prognosis.

I am not entitled to any benefits. I guess I’d be entitled to contributions based job seekers allowance or whatever it’s called, for a while.

I like my job. I’m good at it and it’s good for my mental health. I work full time. It’s a good company to work for.

I don’t have life insurance or critical illness cover. My mortgage was paid off years ago. If I’m still employed at time of death, there’s a four-times-salary death in service payout. But nothing for long term ill health. If I’m off sick for a long time, I’ll be fired.

I have some savings and a pension I can cash in. The pension pot has 160k in it. It’s not a defined benefit one, just a cash pot. My employer puts in 6% of salary. My state retirement age is 67.

I worry a lot about money and running out of money and paying bills. I have two young 20- something DC who are semi independent and I worry about them and want to leave them as much money as I can.

What would you do?

There’s so many factors to consider here, but I just wanted to say you sound lovely.

You’re about 10 years younger than my mum, but had she been in this position at 60, I’d have told her not to worry about me. I’ve been telling my parents that for years. Make the choice for you, and that will make your children happy.

Much love

Thank you, all.
To answer some questions:

Any redundancy would be quick out of the door. No six month wait. It would be within a month.

160k pension pot seems to give around 7k a year on rough estimates, not sure if index linked or not, or if starting from age 60. It would be down to me to choose what to do with it. Around 558 a month. Not enough. I was quite shocked as it’s a lot more than the average. I suppose you’re meant to add the state pension, which is a long time off. Or perhaps people also have those good employer pensions of the traditional type such as for teachers or nurses.

I could be sacked with no payout at all due to incapability if I’m off sick.

If I took vr, what other work could I do? There used to be freelance work but it’s all nonexistent now. I’m limited in what I can do.
I have a first-class degree from a top university, plus MA, in a humanities subject, but from a long time ago.

I really didn’t expect to be in this position. It’s a bit crap.

It maybe worth getting a free session with Pensionwise https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise which is a free government service which advises on pension options. As your life expectancy is limited you should be able to get much more than £7k a year. Did you explain to your pension company about your health? You can take 25% of a pension pot immediately tax free I think. So you could have £40k plus the £32k with only tax on £2k of that. Plus start your pension though that maybe taxed if you start it this tax year so maybe better to wait to next tax year.

In some situations you can take your entire pension pot tax free - I think its when life expectancy is under 12 months.

Could you manage on just the state pension if you got to 67? If you aren't expecting to make it to 67 you could take redundancy, eek it out as far as you can, then draw your £160k down to see you through to state pension age, then manage on that if you can? As it doesn't sound like you think you're likely to live that long?

What about other options like part time work if you did take redundancy?

Oh yes this is a good plan - you may be able to get a much better value annuity if you have a short life expectancy which might give you surety if you do have good luck and a long life span.

I’m thinking the same - quality of life is key here and if they make you compulsory redundancy it’s a lot less and the situation regarding the industry you work in and sadly, your diagnosis, will remain the same.

I think too tho, everyone is different, my dad had stage 4 cancer (bowel) and he lived 9 weeks from diagnosis but he had already retired and they said he could live another 2-3 years but he sadly got a chest infection and wasn’t robust enough to fight it off. He was 75.

The death in service benefit would be playing on my mind for my kids too, however if they make the role redundant before that occurs it could become irrelevant.

I think all things considered - I would take the money and have some nice memories with your kids.

You say your mortgage is paid off, is it a large house? Could you sell and downsize and release some extra money??

You sound a lovely thoughtful Mum to your kids and I hope that whatever you decide to do makes you happy.

I am sorry to hear of your health issues OP .

I think in your circumstances , I would pursue VR , once I had carefully looked at my finances , outgoings etc . I would as others have said take all the free financial advice available too .

I think as there is a possibility / probability that you may be subject to compulsory redundancy in the future this would be a major factor for me .
I think you are hesitating for a number of reasons , not least due to the financial uncertainty and the fact that you enjoy your job . You mentioned that your job was also good for your mental health and as others have said you may be able to look at volunteering / or perhaps a hobby that you enjoy / part - time work .

I think you also need to factor in the emotional / psychological toll that a department / overall workforce faces when there are potential
compulsory redundancies too. As this , can have a significant impact on morale too . This may be something that your workplace has already experienced too .

I think you can also look at ways to reduce your existing outgoings and perhaps boost your income . No expert , and they certainly won’t make you rich overnight . However , things like Vinted , pet sitting , air b’n’b are things to look at and if there is a need for any services in your area .

I know a lot of people say get a lodger , not sure if your DC are at home , or may have already left / be looking to move out in the future . I personally would hate to share my house with a lodger , but again depending on any demand in your area / having a spare room - may give you some extra income .
I personally hate dealing with the uncertainties in life and you have already been handed a poor hand with your cancer diagnosis . I think if you can at least take some control of your future i.e by jumping before you are potentially pushed - this may give you some control of this area of your life . That would be on the basis that you have sought some financial advice and also worked out your figures .
Depending on how mature your DC are , is it something that you also might want to discuss with them
? I wouldn’t say to them that any views they give to you will be a determining factor , but that you want to factor their views in with the other factors in reaching a decision .

There are also lots of money saving threads on here and lots of useful info . Whatever you do , I hope that you have a long and happy future ahead with your DC x