Saturday, 3 October 2015

September 2015 Update

This month saw what I would regard as the first "real" reduction in our assets as we withdrew some of our cash to fund my eldest son's university fees. It was a little painful as it felt like the end of "growing" our pot and the beginning of using it up and I hadn't expected to be entering this stage of the process for a couple of years yet. Still, I have everything worked out and I'm fairly confident that we're on track to be able to stick to our plan that I should retire no later than April 2017 (and hopefully a little earlier - more about that later).

In addition to the drop in our cash holdings there's also been enough market turbulence to do this to our investment portfolios and I expect there's more to come:

A's ISA£36,920.590.20%-8.40%7.00%
J's ISA£13,779.960.50%-7.40%5.40%
SIPP / CIS Pension£34,771.050.00%-1.80%5.80%

Luckily I think we can ride it out as (apart from my SIPP) we don't need these funds any time soon.

Yesterday I sent in my official request to be considered for Voluntary Redundancy in April 2016. My manager needs to cut between 9 and 12 people from the team over the next two years. Chatting with my colleagues suggests that there's not going to be a shortage of applicants. It's not a happy place to work any more, the cuts in services are depressing and demoralising and public sector wage increases are set to be capped at 1% for the next 4 years.

However, I have reason to believe that I may be fairly near the front of the queue as I have a niche job providing a specialist service that could be delivered totally differently (i.e. outsourced) or supported at a much less responsive level. The public who depend on it (who are incidentally some of the most disadvantaged members of society) would no doubt notice the difference, but needs must when the devil drives :-)

As I mentioned in my last post, redundancy would be a financial godsend to me and the figures I have been supplied with regarding the payout I could expect are even better than expected. I would be entitled to £24,000 redundancy payment plus immediate access to my pension unreduced. I'm not counting my chickens yet (although I have of course made contingency plans on what to do with the money :-)) but I am increasing my AVC contributions to the maximum allowed (50% of gross monthly salary) just in case. Pre-2014 LGPS AVCs can be taken completely tax free (this perk has been removed for anyone starting to pay in after March 2014), so boosting this fund is a better option than paying any more into my SIPP as, if I do get immediate access to my LGPS pension, anything I take out of the SIPP, over and above the TFLS, will put me over the tax threshold. The only risk is that if I don't get VR and have to revert to plan A, I won't be able to get hold of the AVCs until I take my main pension. This may make things a little more difficult to manage for a couple of years as I will have run our cash reserve right down and getting flexible access to my CIS FSAVC isn't as straightforward as I thought, but I think it's worth taking the chance.

So now it's just a waiting game to see if I'm one of the "lucky" ones. We should know by the beginning of December as they have to allow for the 3 month notice period. It might be a very jolly Christmas.

(Oh, and we won £25 on our Premium Bonds too - bonus :-))


  1. Hi Cerridwen - good luck with your request. Public sector is a dire place to be working these days if you're motivated by any sort of service ethic. You're better off out of it.
    Hope it works out for you!

    1. Hi Broadbandylegs, I think I'm better off out of it too. It's very painful to see the slow death of services which are vital to some people but because they are irrelevant to others (the ones with money that is) they are easy to axe. The private sector just would not be interested in providing the kind of free service I work with for the sake of "social inclusion" - what's in it for them? Government should be able to see the need (for the sake of us all) but this one is managing to turn a blind eye.

  2. Hi Cerridwen

    Interesting to hear how you feel about transitioning from 'growing' your pot, to 'using' it.

    Fingers crossed for your application and congrats on your premium bonds win! :-) I'm continuing to buy bonds myself - in fact, I may start an emergency fund of premium bonds rather than (or as well as) just in an instant cash account!

    1. Thanks weenie.

      I'm using our PB account as a cash "parking lot" at the moment. There's easy access out of the account if necessary and no worries about an almighty crash causing havoc at any minute. Plus there's always the chance of a big win :-)

  3. Hello Cerridwen - I have been reading some various Early retirement blogs. But I must say yours struck a chord. I to am in the LGPS and coming up to age 57. My (modest) target annuity will not be achieved for about two or three years (so sixty). However, the other option is if they make me redundant now then as you have stated, I will receive my pension in full. Freedom is not far away!!!


    1. Hi Keith and many thanks for your kind comment. It's good to hear from a fellow public sector worker

      I have a theory as to why the FiRe community contains so many people who work in banking/finance but I would never mention it in their company so this is just between ourselves :-):

      Maybe the urge to escape early says more about the nature of job than the drive and ability of the people who are pursuing it so resolutely? As someone who (until recently) had no doubt about the real value of my work I can't imagine what it would be like to spend years doing something that didn't bring its own (non-financial) rewards. Soul destroying. Just like working in the public sector is fast becoming. Teachers, doctors, social workers, colleagues I work with every day - all still trying to do a good job for reasons they really believe in, but seeing big holes forming in their services and all the time being told by the government and media that their work is of little value.

      Many more of us are trying to retire early now - not just the people who could never know what it would be to find true satisfaction in their jobs. I hope redundancy does come your way soon :-) (But how sad that I should be saying that, and wishing it for myself too).

    2. The reason the UK FIRE community is so full of finance employees is five-fold:

      - its quite possible for a mid-late twenties no kids couple in certain finance areas to be earnings £100,000 EACH so FIRE is easily attainable in a short /medium time frame
      - other careers such as engineering in the UK pay a lot less than in Europe and the USA compared to certain finance careers, so FIRE simply isn't an option
      - a career in the better paying parts of finance generally requires a degree or two in a numerate STEM or finance/management field so the maths of FIRE is instantly recongisable
      - lots of high paying finance fields have wide based pyramids and up or out hiring cultures where you can quite simply be finished at 40 (or 30), therefore FIRE is just normal
      - people who work in finance tend to value money above most other things, if they value money - then why would they waste it?

    3. Thanks Neverland.

      I was being a bit tongue-in-cheek there, although I would still argue that having a vocation makes people a lot happier all round and less inclined to have an overwhelming urge to get out of the work place as soon as possible.

    4. Well, I think thats fine unless it stops being a vocation...then its just a job and probably not a very well paying one

    5. @ Neverland

      I've seen you mention this on a few blogs recently. I work in Finance and have seen salary lists from time to time, and to be honest there are usually only 1 or 2 Finance people in the top 10-15 salaries, mainly the CFO, who is the only one likely to be earning anywhere near the £100k you mention. Maybe you are talking more about bankers like theescapeartist and underthemoneytree?

      In real economy companies outside London (where lower house prices make FIRE a more realistic prospect) it tends to be the CEO and the top technical and sales people who are earning the most, so where are their blogs? Could it be that the FIRE concept somehow appeals to certain personality types, the ones who love spreadsheets and sitting at a computer blogging rather than going out spending and socialising? And as a result you get accountants and engineers writing all the FI blogs?

  4. It's kind of sad that these days people sometimes WANT to get made redundant, although I guess it is not unique to the public sector... in fact I guess it's far more common in the private sector.

    Anyway, I hope you get it, just because it's something you want and would probably make you happier!


    1. Thanks M.
      Certainly I'll be happier having time to myself and not having to be so close to the cuts but no doubt the cuts will still go on and, as a citizen, that makes me very sad (and angry).

  5. The uncomfortable fact is that the redundancy payments, the pension payments and the AVCs all come out of the same central fund that is used to provide services to the public

    There is no magic money tree there is just income, expenses and borrowings same as an individuals incomings and outgoings

  6. The LGPS is "almost" fully funded so the biggest chunk of my pension comes from there, my AVCs were paid out of my salary (with the help of HMRC) and the point of the redundancy payment is to avoid having to pay my salary in the future, but I take your point. But if making folks redundant didn't save money in the long run, and thereby mean that there is more left to keep services afloat (in theory- it's a big ask though when you've lost the staff that support the services) there wouldn't be much point in doing it.

    I would benefit personally from the cuts in the form of having access to an early pension which I can afford to take, but I wish it hadn't come to this in the overall scheme of things :-) If you had given me the choice in 2010 of "get your pension in 6 years" or a get a Labour Government that didn't make the cuts, I would still have voted Labour.

    Shrinking funding for public services is behind all sorts of loss, not just the obvious ones, including the fact that many of my colleagues will no longer have jobs and so won't be paying any more taxes.

    1. "But if making folks redundant didn't save money in the long run, and thereby mean that there is more left to keep services afloat...there wouldn't be much point in doing it"

      A quick flick through the history books of government decisions would reveal multiple instances where cuts were made which cost a lot more in the long run, e.g. care in the community, right to buy, cutting back on the defence of the falkland islands in the late 1970s, PFI projects, AGR nuclear reactors etc

      But of course I am sure the current government are omnipotent and not just a bunch of entitled idiots who just make things up on the hoof...

  7. "or get a Labour Government that didn't make the cuts": in the whole of its existence NHS expenditure has increased in real terms every year EXCEPT under the late 70s Labour Government.

    The biggest closer of coal mines was the Wilson Labour government in the 60s. The railway closures following the Beeching report were done by Wilson's Labour government.

    It's pie-in-the-sky to assume that Labour means "no cuts".

  8. I never said they hadn't but it's unlikely that they would have made these particular ones. Given that part of the drive for them comes from a "shrink the state" ideology and a punitive attitude towards those on benefits. Which you may agree with, I do not. We can leave it there.

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