Can I Afford to Quit My Job UK
Discover Your Financial Readiness Use Our UK Can I Afford to Quit Calculator to Plan Your Career Break or New Venture Confidently
Dreaming of handing in your notice to start a business, travel the world, or simply take a well-deserved break? It’s a common thought, but turning that dream into a reality requires a solid financial plan. The biggest question standing in your way is likely: "Can I really afford to quit my job?"
Guesswork isn't good enough when your livelihood is on the line. You need clear, hard numbers to make a confident decision. That’s precisely why we created the Can I Afford to Quit? Calculator. This simple tool helps you understand your financial runway – the exact number of months your savings will last – so you can plan your next chapter with peace of mind.
Why You Need a Plan Before Handing in Your Notice
Quitting your job without a financial safety net is a huge gamble. Your regular income stops, but your bills don't. From your mortgage or rent to council tax and grocery shopping, your essential outgoings remain.
A proper plan helps you:
- Avoid financial stress: Knowing you have enough money to cover your expenses removes a massive weight from your shoulders.
- Focus on your goals: You can concentrate on finding a new job, building your business, or enjoying your career break without worrying about paying the bills.
- Prevent debt: A financial buffer stops you from having to rely on credit cards or loans to get by.
- Make a clean break: You can leave your old job on good terms, knowing you are financially secure and not acting out of desperation.
How to Use Our Can I Afford to Quit? Calculator
Our calculator is designed to be straightforward. It takes your current financial situation and gives you a clear answer in seconds. Here’s how to use it.
Step 1: Enter Your "Freedom Fund" (Total Savings) This is the total amount of accessible cash you have set aside for this purpose. Include money in your current account, savings accounts, and any cash ISAs. Do not include money tied up in long-term investments, your pension, or the equity in your home, as you can't access it easily.
Step 2: Enter Your Expected Monthly Income If you quit your main job, will you have any other income? This could be from:
- A side hustle or freelance work
- Rental income from a property
- A partner's contribution to shared bills
- Any benefits you are certain you can claim
If you expect to have zero income, simply enter £0.
Step 3: Enter Your Essential Monthly Expenses This is the most critical step. Be honest and thorough. You need to calculate your "bare-bones" budget – the absolute minimum you need to live on each month.
Your essential expenses include:
- Housing: Mortgage or rent payments
- Bills: Council tax, gas, electricity, water, internet, and phone
- Transport: Car payments, insurance, fuel, or public transport costs
- Food: Your realistic monthly grocery bill
- Insurance: Life insurance, income protection, pet insurance, etc.
- Debt Repayments: Student loans, credit cards, or personal loans
- Dependants: Costs for children or other family members you support
The Output: Your Financial Runway The calculator will instantly show you how many months your savings will last. This is your "financial runway." For example, if the result is "12 months," you have a full year of financial freedom before your savings run out.
Worked Example: Sarah Plans Her Business Launch
Sarah is a 35-year-old graphic designer who wants to quit her agency job to start her own freelance business. She uses the Can I Afford to Quit? Calculator to see if she's ready.
- Her Freedom Fund: She has £15,000 in a savings account.
- Her Expected Income: She has one small client lined up that will bring in £300 per month.
- Her Essential Expenses: She has carefully calculated her monthly outgoings.
| Expense Category | Monthly Cost |
|---|---|
| Rent | £750 |
| Council Tax | £120 |
| Utilities (Gas, Elec, Water) | £150 |
| Groceries | £250 |
- Total Monthly Expenses: £1,270
Calculation:
- Monthly Shortfall: £1,270 (Expenses) - £300 (Income) = £970
- Financial Runway: £15,000 (Savings) ÷ £970 (Shortfall) = 15.4 months
Result: Sarah has over 15 months of runway. This gives her the confidence that she has more than a year to build her client base before her savings run out.
Common Mistakes to Avoid When Planning Your Exit
Using a calculator is a great start, but it's only as accurate as the numbers you put in. Avoid these common pitfalls:
- Underestimating Your Expenses: It's easy to forget small but regular costs. Review your bank statements for the last three months to get a truly accurate picture of where your money goes. Don't forget annual costs like car MOTs or birthdays – divide them by 12 and add them to your monthly total.
- Forgetting About Tax: If you receive a final bonus or payment in lieu of notice, remember that it will be taxed. Likewise, any freelance income you earn will be subject to tax and National Insurance, so set aside a portion of it for HMRC.
- Being Too Optimistic: Hope for the best, but plan for the worst. It might take you longer than expected to find a new job or for your business to become profitable. Having a longer financial runway provides a crucial buffer.
- Ignoring Your Pension: When you quit your job, you also stop contributing to your workplace pension, and you lose your employer's contributions. Consider making private pension contributions during your break to keep your retirement savings on track.
Protecting Yourself and Your Family During a Career Change
Leaving the security of a permanent job means losing more than just a salary; you often lose valuable employee benefits like health and life insurance. This is a critical time to review your personal protection.
Private Medical Insurance (PMI) Many employers offer private medical insurance as a perk. When you leave, this cover ends. Relying solely on the NHS is an option, but waiting lists for certain treatments can be long. A PMI policy can give you peace of mind by providing faster access to diagnosis and treatment in a private hospital.
As expert brokers, WeCovr can help you compare policies from leading UK insurers to find a plan that fits your new budget. It's important to understand what PMI covers. Policies are designed to cover acute conditions (illnesses that are short-term and curable, like a joint injury or cataracts) that arise after you take out the policy. PMI does not cover pre-existing or chronic conditions (long-term illnesses like diabetes or asthma).
To learn more about how it works, visit our guide to private health insurance.
Life Insurance If you have a mortgage, a partner, or children who depend on your income, life insurance is essential. Your "death-in-service" benefit provided by your old employer will cease when you leave. A personal life insurance policy ensures your loved ones would receive a lump sum to help them financially if you were to pass away. This is especially important if you are taking on business loans for a new venture.
At WeCovr, we can help you find affordable cover. Better yet, if you purchase a life insurance or PMI policy through us, we can often secure discounts on other types of cover you might need. As an added bonus, WeCovr customers get complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, helping you stay healthy during your career transition.
Frequently Asked Questions (FAQs)
1. How many months of savings should I have before I quit my job? A common rule of thumb is to have 3 to 6 months of essential living expenses saved. However, if you're starting a business or taking a long career break, aiming for 12 months or more is much safer. Use our calculator to find your personal number.
2. What should I do about my pension when I quit? Your existing workplace pension pot remains yours. You can usually leave it with the current provider or transfer it to a new provider or a personal pension (SIPP). You will stop making contributions, so consider setting up private contributions to avoid a gap in your retirement savings.
3. Can I claim benefits if I quit my job? It can be difficult. You generally cannot claim Universal Credit or New Style Jobseeker's Allowance for around 3 months if you left your job voluntarily without "good reason." Check the government's official guidance for the most up-to-date rules.
Take the First Step Towards Your New Future
Don't let financial uncertainty hold you back from your dreams. Knowledge is power, and knowing your numbers is the first step to making a confident, informed decision.
Use the Can I Afford to Quit? Calculator today to discover your financial runway. Once you have your result, speak to the friendly experts at WeCovr to ensure your health and family are protected, no matter what your next chapter holds.
