So, the announcement was made this week. I didn’t expect it so soon and held my breath as I read the email. They’re offering 10 months’ salary to those who’ve been there as long as I have to take voluntary redundancy (VR). While less attractive than previously (12 months’ salary during the last round about 2 years ago), for someone who’s been considering leaving a good while, it is definitely not an offer to be sniffed at.
Other voluntary cost-saving measures include reduced hours and a career break between 3 months and 2 years. While these had been possible previously in some form, now they were actively encouraged and acceptable, so you didn’t need to think up a worthy reason. October will bring further news once student numbers are known (I work in higher education) and compulsory redundancies are likely made.
I was dizzy thinking about my options.
It’s a no brainer, opined Mr Firelite, 10 months’ pay?! Take the money and run!
The very same day, I checked out vacancies at the Open University and there were four suitable courses I could teach with a closing date that very day. So I applied for each one until at midnight I turned into a pumpkin! Or at least my brain felt like mush. I got three applications in on time. Ideally, I’d take up teaching one or two courses, but my chances of getting the jobs are middling as surely others around the region are in the same kind of conundrum.
The aim isn’t really to replace one job with another, but to hit a kind of semi-FI (or my originally planned ‘midlife gap year’). There are many ‘pull’ factors to take time out to focus on other stuff like my health, creativity and family.
But to lose the income quite suddenly is obviously a blow especially given my recent enjoyment of seeing my savings rate climb each month and the impact that was having on my savings!
So, how long would 10 months’ salary (around 38k net) last me?
There’s a tonne of ifs and buts, but one possible scenario could look like this:
- Buy 2 buy-to-let properties with 25% deposit* (one I’d been saving, one with redundancy money). Estimated income based on 4% interest-only mortgage of £93k x 2: £4k pa
- Teach 1-2 Open University courses Oct-June** (pro: 7-14 hours per week but very flexible; con: occasional weekend work) Estimated income: £4k – 8k pa
- Small consultancy work for research projects with existing/new links (pro: higher pay and continuing my ‘legacy’; con: could eat into my time). Very estimated income: £2k pa (could be more if put work into this)
Total income: £10-14k pa, plus £6k remaining VR fund as a pot/cushion
I estimated that from September I could live on £10k pa as my ‘base’ amount (i.e. £300pm and £1.4k holiday/discretionary once joint/family spends are considered) and £14k would be more comfortable.
This doesn’t look bad! I’d spend the bulk of my time doing something other than paid work. The OU would take up 2-3 mornings a week and help retain some structure in my life (and some level of acceptability to the outside world) besides the school run.
Worst case scenario? With no sources of income, my redundancy money last 2-3 years before needing to find a job without any idea what that job might be. Fine, but psychologically a little anxiety inducing after the first year.
The main thing I’m wrestling with is cutting my ties as it would be goodbye to my career (without moving home, which I don’t see happening).. I put 23 years of my blood sweat tears into the same place (including studying), and deep down, it’s not easy to let go. Mr Firelite says this should not even be a consideration or I’d never leave! I do know I’m ready for a change.
The alternative is to follow one of my original plans: To take a year out unpaid, eat into my savings a bit (maybe even as little as £6k if I teach 1 OU course), then return for another year or two (assuming I’m not made redundant meanwhile). But without the VR money, you’re thinking! Yes, but this gives the option/safety net of working there longer if my dissatisfaction with work dissipates having taken a year out. This is a major unknown right now.
If I stuck at it for five (or so) more years after taking a year out, then I could be virtually be ‘set for life’. Wouldn’t that be nice?
I haven’t shared anything with family yet. Or colleagues, besides my line manager who I plan to meet after next week. I’ve mainly gone within, mulling over things and now letting it simmer.
Where in the past I’d have been very quick to share this stuff, this time I feel that other people’s opinions – especially in the light of the Coronavirus and economy – would not necessarily help. It might be fear driven. Why am I sharing here? I’m not sure really, for completeness, for reflection’s sake.
Once more info comes to light from HR and my line manager, I will feel more comfortable with whatever I decide. Shame my manager is on annual leave next week!
The only thing I feel certain about right now is that not applying for one of these two options would be the wrong option for me.
*Note that buy-to-let mortgage providers are now being more stringent in the current financial climate and many are not offering products if you have less than 40% of the deposit. It’d have to be under both mine and Mr Firelite’s name, seeing as I wouldn’t be in employment and assuming that Mr Firelite is not made redundant! Income is highly estimated from a property I found on Rightmove that cost £125k and another flat in that block renting out for £750pcm. It includes 10% management fee, 10% for furnishing/voids.
**Big ‘if’ as to whether I get the job, but one of the additional pros is that they would continue contributing to the same private pension I have. Another is to get the opportunity to study one of their courses at a greatly reduced fee. The main ‘con’ is the possibility of giving occasional weekend tutorials when Saturdays to me are prime free time.