Phased Retirement

[LordGrover]

My employer of 40+ years has asked me to consider working part-time for the foreseeable. I just wondered if anyone with experience or knowledge knows of any gotchas or downsides to doing so?

I was planning on retiring 31 May, and was going to give three months notice next month - but MD got wind of my intentions. Called me in for a chat, all very amicable, though he's concerned about filling my role/shoes. I can choose days/hours and retain my salary pro-rata which is not too bad. Reducing my hours will get me below the higher tax rate, and maybe continue contributing to my workplace DC pension.

It all seems pretty good, so I'm beginning to wonder if I'm missing something...

[Panamax]

I don't think there's anything to trip you up here.

If you get any "benefits" like car allowance, private health insurance or whatever I would certainly ask that they continue at the 100% level, not reduced pro-rata with your hours.

[alscar]

As Pana has said in particular with regards to the PMI benefit.
I imagine you could even stage down your final leaving day on a monthly basis.
I’m assuming you don’t have any outstanding benefits like bonus payments which might be time related so perhaps just double check you will still be going as a “ good leaver / retiree “?
I gave 12 months notice ( that was in my contract ) and my CEO said for the first 6 months he trusted me sufficiently to not know what I was actually doing but for the final 6 months he definitely expected less of me !

[nickfrog]

It seems they want you more than you want them. So should it be a bit more than pro-rate? A good time to negotiate a pay rise (per hour / day).

It seems a good way to do it otherwise. You can put 80% of your income (up to the threshold) into a SIPP and claim pension tax relief on tax you never paid in the first place.

[Groomio]

I dropped to three days a week six months before I took early retirement, pro-rata pay and holidays it's a good way to ease into full retirement.

I don't see the point in trying to negotiate a pay rise with only a few months to go, leaves a bit of a bad taste in the mouth.

[Byker28i]

I dropped to 4 days a week, 34 hours about 6-7 years ago. took a 10% drop in salary for an extra 50+ days a year holiday as I didn't work Fridays.

Worked great for me

[RDMcG]

Sounds like a good deal to me. You still have the option of retiring at any time if it does not work well, and can extend your working time, thus reducing the years when you are depending on pension/investments.

[nickfrog]

Groomio said:

I don't see the point in trying to negotiate a pay rise with only a few months to go, leaves a bit of a bad taste in the mouth.

The way I understand it, the OP is reviewing his intention to retire.

[locoloco]

Not sure if OP means going p/time from 'now' or from May (when he was going to retire)?

My 2 cents; (and i'm not well versed in UK employment Laws these days), if going p/time 'now', is there anything that prevents employer from issuing notice and effectively they'd maybe be getting the best of both worlds? (shorter term cover, reduced cost, ability to terminate easily/quickly at lower cost) ??

I'd be inclined to suggest a terminal bonus, payable on the last day that OP agrees to stay until, or sooner of employer reneges.
Doesn't have to be a fortune, just enough to draw a line in the sand.

Benefit to employer is knowing that OP is incentivized to stay til that point, and OP gets a bit of 'cover'.

[LordGrover]

Maybe starting 1 February if we can agree in time.

Still undecided on days/hours; probably just down to four days initially for 4/5 salary, retaining company medical insurance (aviva) - typically bonuses are rare and not meaningful. Not had one since June 2024 - very much dependant on company performance not individual and it's been difficult for a while (construction and engineering supplies).

In addition I may suggest/request reduction in hours. Currently M-Th 08.00-17.00 F 08.00-16.00 1 hour lunch. Quite fancy finishing an hour earlier every day, especially once daylight returns. I'll try to get that for nothing - they can choose to pay me and get 'full service'* or reduce my pay and get just the hours paid for. Not sure how that would be received though - don't want to upset the boat.

*Tech Support for which I've always been available at pretty much any time - it's not often, but messages and calls are actioned 'out of hours' if I'm able. Happy to continue if I'm paid for it. Day off will day off though.

[NDA]

Assuming this is a variation of your contract, rather than a new contract, then I can't see a downside.

I had a couple of staff on 4 day weeks and they were paid pro-rata less. It worked quite well.

Being 'available' is very valuable to your employer and as long as you can genuinely take that extra time off and not tinker with work things, then it's a good way to go.

I retired too early and would now always urge people to keep working as long as possible. There is some truth in the adage that 'a man needs a mission'.

[Mark83]

I would willingly do this so long as I enjoyed the job, enjoyed the social side of my colleagues and I wasn't expected to complete five days work in three days. I had a senior colleague do this and he spent the first day catching up on the days he was off but so long as that's acknowledged internally, I see no issue. He inspired me to up my pension contributions to do the same towards the end of my career as I saw my parents have a mixed reaction to stopping work immediately.

[alscar]

LordGrover said:

Maybe starting 1 February if we can agree in time.

Still undecided on days/hours; probably just down to four days initially for 4/5 salary, retaining company medical insurance (aviva) - typically bonuses are rare and not meaningful. Not had one since June 2024 - very much dependant on company performance not individual and it's been difficult for a while (construction and engineering supplies).

In addition I may suggest/request reduction in hours. Currently M-Th 08.00-17.00 F 08.00-16.00 1 hour lunch. Quite fancy finishing an hour earlier every day, especially once daylight returns. I'll try to get that for nothing - they can choose to pay me and get 'full service'* or reduce my pay and get just the hours paid for. Not sure how that would be received though - don't want to upset the boat.

*Tech Support for which I've always been available at pretty much any time - it's not often, but messages and calls are actioned 'out of hours' if I'm able. Happy to continue if I'm paid for it. Day off will day off though.

I’d be tempted to apply “ KISS “ principles and initially ask with a smile exactly what in an ideal world you would like.
4 day week for say the first month of wind down 3 months ,then 3 day week for the next month then finally 2 day week for the final month - all at simple pro rata.
Assuming that’s what you want and can afford obviously.
Then within that also say you would like to finish 1 hour earlier every day for the entire 3 months but at no salary reduction.
You can then add the bit about “ on call “ service if you are able but you won’t charge for that.

[mikeiow]

The thing to be wary of is you dropping to (say) 3 days a week but then effectively doing the work you might have done in 4 or 5.

If that is clear in your head, fill your boots!

[Steve H]

NDA said:

I retired too early and would now always urge people to keep working as long as possible. There is some truth in the adage that 'a man needs a mission'.

Part time is a good alternative to a sudden stop for many. Interesting that you feel you finished too soon, it’s not a view that comes up often on the retirement thread but one that should always be considered I think.

[nickfrog]

NDA said:

I retired too early and would now always urge people to keep working as long as possible. There is some truth in the adage that 'a man needs a mission'.

I retired about 5 years too late. I have plenty of missions! They just don't involve work.

[Jon39]

For 40 years employment, you might have all or part Defined Benefit pension.
Those pension schemes benefits (pension payments received) are often calculated using the final 12 months salary figure.

If you change to part time, would your whole DB pension be reduced, because of a lower final 12 months salary?
If so, it could reduce your pension considerably.

NDA said:

I retired too early and would now always urge people to keep working as long as possible.
There is some truth in the adage that 'a man needs a mission'.

Age 53 for me.
Certainly not too early and have always been busy with activities of my own choice.

NDA is right though for anyone who might end up sitting in front of daytime TV.
That would probably result in early death from brain numbing. -

Edited by Jon39 on Wednesday 21st January 17:58

[5pen]

I’d be vary wary of carrying on part-time for a lower salary and then being responsible for everything you used to do in when you were full-time. What are the management’s plans for a resource to cover the stuff you’ll no longer have the capacity to fulfil?

I realise this is very personal, but once you have more free time and start enjoying that, it might become more of an inconvenience than it’s worth.

[outnumbered]

LordGrover said:

My employer of 40+ years has asked me to consider working part-time for the foreseeable. I just wondered if anyone with experience or knowledge knows of any gotchas or downsides to doing so?

I was planning on retiring 31 May, and was going to give three months notice next month - but MD got wind of my intentions. Called me in for a chat, all very amicable, though he's concerned about filling my role/shoes. I can choose days/hours and retain my salary pro-rata which is not too bad. Reducing my hours will get me below the higher tax rate, and maybe continue contributing to my workplace DC pension.

It all seems pretty good, so I'm beginning to wonder if I'm missing something...

What would be your reason for continuing to work ? Financial, concern about how you'll fill your time, other ?

I retired more or less as early as I could, at age 56, on the basis that I could afford it and you're a long time dead. I still get bored from time to time but then I used to get bored at work as well. And if I get bored now it's my fault, not somebody else's.

To me, it doesn't sound like a great offer. If they need you more than you need them, then make them pay for keeping you on.

[gotoPzero]

LordGrover said:

I was planning on retiring 31 May, and was going to give three months notice next month

Do this.