The Spectre Returns to the Feast

A few months ago I mentioned that the possibility of redundancy was looming large and that I was making plans for how to keep on track if it did.

However, a few weeks after telling us what their 5 year savings plan meant in monetary terms and that job cuts were part of the plan, management released a further statement saying that there categorically would not be any further offers of voluntary redundancy and that they expected to make the necessary staff savings by natural wastage alone. The more cynical amongst us were very sceptical that this would turn out to be actually the case given the level of savings required, coupled with the fact the workforce that had already been heavily "wasted" (both naturally and unnaturally) by two previous rounds of cuts.

It turns out that we were right to be cynical because we have now been told that there are another 22 posts to be lost in 2015/16 out of a workforce of around 80. In other words another 25% cut. It seems that denying there were going to be any more job losses was just a ploy to force the hand of anyone who was hanging around waiting for VR in the hope that they would go before they needed to be paid to do so. Fair enough I suppose, but it has put the rest of us through a roller coaster ride - "Perhaps my job is OK, perhaps it isn't, yes it is, oh, wait I minute no it definitely isn't".

All this plays merry hell with my financial planning as I think I'm pretty much in management's sights for redundancy.

My task now is to work out the best way of fitting it into my plans rather than letting it ruin them.

On the plus side, I would get to finish work even earlier :-) I reckon sometime after April 2016 when I would be 57.

On the minus side - how can I fund this when we've just decided my husband will fully retire in Nov 2015? We will need to be able to to live on his DB work pension (State pension not due till Nov 2018), the rent from our studio flat, any dividends I can wring out of our ISAs, whatever finance comes my way as part of the redundancy and my personal pensions (SIPP and FSAVC).

I've been hard at work on the spreadsheets and I'm hopeful that even the worst case scenario will be doable. The worst case being where I come out with a redundancy payment alone (I'm due around £20,000) and unable to access my pension until I'm 63. (This is the earliest reasonable date I can take it without the actuarial reduction being too big of a hit to bear). I am heartened by the fact that all my colleagues who have been made redundant up to now have been given access to their pensions as part of the package and this would certainly be a great result from my point of view but I'm not banking on it.

What this all means is that I have to force feed my SIPP as hard as I can for the next year until my husband retires and hope that will be enough to do the job. I've stopped paying my AVCs (except for a token amount) as they're not payable until I take my main pension and I'm going to reduce the payments into our ISAs so that I can divert the cash into my pension. I've decided that if this turns out to be a wrong move and I end up with more in there than I can withdraw in a tax efficient way, then I'll be happy to take the hit as it will mean that I've got my £8,000 a year LGPS pension 6 years early and unreduced. In that situation I'd be happy to put some of my tax relief back into the public coffers.

(A little good news - I was meant to be on strike today but Unison have negotiated a better pay offer that is heavily weighted towards the lower paid - up to 8.5% for those on the very lowest pay (ie those on around £12,000 pa). For me, this is the part of the improved offer that is far more satisfying than the fact that they also upped the 1% offer to 2.2% from Jan 2015 for the likes of me. What the ongoing cuts will do to services is another worry entirely. I really can't see how the services I look after can be maintained at the current levels of funding, but then I don't suppose that will be my problem for very much longer. Except that the problem belongs to us all  - as a citizen I quietly despair).

(picture courtesy of http://jrgee.deviantart.com/art/Ghost-In-The-Room-242691081)