superannuation

sneezyboots

might be a long one.... sorry.

Usually i am quite clued up about money, banks, savings and stuff but i cannot decide what to do here as i have never considered it before and saw it as an 'old people' thing. In september i started my first year as a teacher (was 22) and they started taking superannuation pension from my pay. not knowing enough about it and thinking short term i opted out of it (which means a slight increase in tax but nowhere near the amount to counter the pension). since then my family (mainly my grandad) went mad at me saying i need to start it again.

As i don't know enough about it i don't want to (yes i know the school contribute to what i pay), so basically, what i am asking is am i being really stupid by not starting it yet? i just don't like the idea of my money disappearing and not seeing it for YEARS. we are also trying to save for a house deposit atm so i figured that the money i am saving on pension now will mean a bigger house deposit and therefore better interest rates on mortgage and then i can start my pension in a few years time. does this make sense?

I am also planning on cutting down to part time in a few years when i have kids and won't be going back full time til they are secondary school age. would that make a difference? plus if i die before drawing my pension what will happen? i seem to think it would be passed onto my OH but how would anyone know and know who to contact as i don't yet have a will. what about if i change careers?

any advice appreciated.

Quiet_Life

First thing Monday morning sign up again........you'll only live to regret it if you don't. Pensions are cheaper to buy the younger you are and teachers schemes are A LOT better than having to buy a private pension. If you should be really ill in years to come you have a good chance of medical retirement from your job and the amount you receive will be bases on your superannuation contributions.
I was 22 yesterday [ well actually 30 years ago, but it seems like yesterday] and although at 22 you feel invincible you really do need to start planning for the future. I longer you leave it, the more expensive it becomes.

pandora205

Many years ago I too was a young newly qualified teacher who had no money and even saving for a house seemed a huge priority. I made one of the best decisions of my life - not opting out of the teachers' superannuation scheme. This is one of the best schemes going - you get tax relief on it (like all pensions) but also your employer pays a hefty amount in. And it's index linked, meaning when you retire, your pension will rise with the cost of inflation.

Now, as I'm less then ten years off pension age (still working in education but not a teacher) I'm hugely interested in the size of my pension, how to increase it and totally relieved I'm a local government employee.

Your grandfather is right... teachers' superannuation is a a great scheme and well worth every penny. And it gives you life insurance too, a significant consideration if you ever have a family of your own.

PS Those years fly by - You'll look back and remember you ever asked the question!

jem16

sneezyboots wrote: »

so basically, what i am asking is am i being really stupid by not starting it yet? i just don't like the idea of my money disappearing and not seeing it for YEARS.

Basically yes you are being incredibly stupid. The Teacher's pension scheme is one of the few final salary schemes left. It has no investment risk to you, a guaranteed pension at the end, plus benefits whilst you are working such as life insurance and death benefits.

we are also trying to save for a house deposit atm so i figured that the money i am saving on pension now will mean a bigger house deposit and therefore better interest rates on mortgage and then i can start my pension in a few years time. does this make sense?

There will always be some reason to put off paying into your pension and you will keep putting it back until many years down the line you will suddenly find yourself having to pay a considerable amount just to get back to where you are now.

I am also planning on cutting down to part time in a few years when i have kids and won't be going back full time til they are secondary school age. would that make a difference?

It will mean you have less years of service. However it will still be better to have 6 years made up of 12 part-time years than 12 years of nothing at all.

plus if i die before drawing my pension what will happen? i seem to think it would be passed onto my OH but how would anyone know and know who to contact as i don't yet have a will.

With a final salary pension your spouse and dependants will get a pension based on your years of service should you die whilst still in teaching. To be absolutely sure who gets it you simply fill in a nomination form for death benefits which is available from the scheme.

what about if i change careers?

You will still have built up entitlement to a final salary pension. The benefits will stay preserved until you reach retirement age.

Opt back in asap!

sneezyboots

ok ok point proven. i'll do it monday

just don't tell my grandad he was right

jem16

sneezyboots wrote: »

just don't tell my grandad he was right

Give me Grandad's email address - I want to thank him for looking out for his granddaughter.

sneezyboots

jem16 wrote: »

Give me Grandad's email address - I want to thank him for looking out for his granddaughter.

one thing he seems to have some sort of thing against is the internet. seems to think if he gets it everyone will steal all his money :eek:
and now says what is the point anyway when he has a grandaughter to google and buy for him every week