Opting out of teachers pension. Confused!

Jack_Griffin

I sure hope the OP does not teach maths!

jem16

hugheskevi wrote: »

For a female aged 41 with a Normal Retirement Age of 65, using the Added Pension Calculator for teachers' pension suggests a factor of about 10 is appropriate which suggests the OP's pension is worth around £50,000.

That may well be the case but the OP isn't taking her Teachers' Pension at age 41.

The point I was trying to get across is that if she left the scheme now and became a deferred member, that £5k pension when she came to take it at age 60 would be the equivalent of a pension pot worth around £166k. (it will of course not stay at £5k as it will grow with CPI)

kidmugsy

dunstonh wrote: »

That is equivalent to around £175,000 in a pension fund. 7 years service has got you £5k and you call that not much?

Oh come on, dunstonh, he's just teasing you; it's not a serious enquiry.

lvader

How long before we have a wave of firemen looking to opt out? The unions are going a great job of lowering furture liabilities.

BristolBob

Cobweb18 wrote: »

However, teacher's pensions have been altered so much that I won't be eligible for a cash lump sum

Joining in on the "DON'T DO IT!" brigade. Even though you don't get the lump sum automatically any more, your rate of accrual is now 1/60 and not 1/80.

You also get death benefits for your family (both in an out of service). So, look on the bright side! If you die in post your OH gets 3x your salary and a pension That is something it would be hard to replace cheaply on the market.

Perelandra

jem16 wrote: »

That may well be the case but the OP isn't taking her Teachers' Pension at age 41.

The point I was trying to get across is that if she left the scheme now and became a deferred member, that £5k pension when she came to take it at age 60 would be the equivalent of a pension pot worth around £166k. (it will of course not stay at £5k as it will grow with CPI)

You can, however, expect that the value of a private (or DC) scheme would grow in real terms between now and 68- something the DB scheme will not necessarily- albeit with risk. It would be fairer to say "a pension pot worth the equivalent of £166k in today's money on retirement", which might imply a pension pot today value at £80k (using real growth over inflation of 3% as an assumption).

But I agree with the sentiment on the thread, it would be an extremely poor financial decision to try to match the return of the scheme through any other option.

Editted: I was thinking it was 17 years to retirement, not 27, so adjusted accordingly

whitesatin

Jack_Griffin wrote: »

I sure hope the OP does not teach maths!

Please go back and read post #9

"Oh, I thought I'd hit upon a great idea but maybe not (I'm an English teacher, not maths!) However, 68 to wait for a pension. Any suggestions on how I can stay in teachers pension but stop working sooner?!"


0/10 for reading comprehension, lol.

atush

Don't leave the pension. Don't let your OH not opt back into the pension.

Regardless of any changes, there is nothing you can do with your less than 200 a month (after 40% tax and NI)that will be as good as or better than the teacher's pension.

Yes, maybe I should throw as much as I can into mortgage over-payments to try and clear it at least five years sooner?

Wrong, you were advised to use a S&S isa allowance instead. Mtgs are historically low (mine is around 1%) so paying off the mtg early doesn't pay just now- far better to tell us what % your is.

How much else have you saved in cash and investments?

Retiring early from the TPS can be made possible by having savings and assets to live off while waiting for the pension to be payable (or waiting for the actuarial reduction to become more palatable). the best way to do this is thryu equity investments, not cash. So use your S&S isas.

Plus, what you have already built up, should be under your old scheme, and only the new scheme will be reduced for every year before 68? The old scheme (depending on which one you are in) will have a lower retirement age?

rob404uk

I think the teachers' pension is good as it stands, but...

What is to stop them changing the goalposts 5 more times before you retire. Politicians are liars, teaching is a profession under attack so do with what you think is best.

dunstonh

rob404uk wrote: »

I think the teachers' pension is good as it stands, but...

What is to stop them changing the goalposts 5 more times before you retire. Politicians are liars, teaching is a profession under attack so do with what you think is best.

Nothing stops them changing it again. However, that doesnt mean wouldnt join the best option available to you. It may be slightly reduced on what was available previously but it is still better than alternatives.