Cashing in Teachers pension

mollyjak

I have 3 years left before retiring.
A colleague has taken advice and she is taking out her pension when she is 58 (4 yrs time) and putting it into an investment portfolio. I don't know how much she will get but the advantages are that you have your pension which would generate an income if you choose, or there is a cash amount to do with what you want. Also the money would go to her husband and then children whereas with the teacher's pension only half would revert to her husband and nothing to her children if something happened but would revert back to the government.
I can see the advantages but am concerned about putting my pension on the line.
Part of it is also a gamble about how long you live for!!! Plus it is index linked.

I am not really into pensions etc but would like to know what others think please??

benood

As a non expert my take is that the teachers scheme is one of the best available - final salary, index linked and government backed. Unless I was terminally ill i'd probably stick with it and take the pension - it's completely risk free whereas a portfolio of investments is the opposite, if she thinks she'll die early how about buying some life insurance with her monthly pension?

jem16

Not exactly sure what you are getting at here.

You can't cash in the teacher's pension. At retirement you will get a lump sum plus a pension. You can choose to take a greater lump sum and less pension - is this what you mean?

Also remember that if you retire before 60, the pension is actuarially reduced.

lic

Don't leave your teaching pension scheme. If you do you will regret it.
You have already invested your pension contributions in a guarenteed investment (your pension). If you cash it in you will risk all your savings on a risky alternative.
At least with what you have now, youknow what you are getting and when, and it will continue to pay until you die, which i hope will not be for a long long time.
PS if you teach english, dont mark this reply for spelling grammer etc.

kenshaz

A final salary earnings related pension is the very best and only a fool or a desperate person would give it up ,there are no better options available.

EdInvestor

mollyjak wrote: »

I am not really into pensions etc but would like to know what others think please??

I'd have thought she will be making a misselling claim against the advisor in about 5-10 years time.

There are quite a few situations where moving a pension into income drawdown can work well, but shifting out of a government-backed final salary scheme early isn't one of them.

dunstonh

I doubt she would find an adviser willing to sign off on a transfer out of teachers scheme into a personal arrangement.

mollyjak

Thank you for all the replies.
You have just agreed with how I feel about it.
I trust this board far more than anyone who would come to my door to sell me something :j

Thanks again

dunstonh

I trust this board far more than anyone who would come to my door to sell me something :j

Yes, its usally not a good idea to get financial advice from the bettaware rep.

Andy_L

mollyjak wrote: »

nothing to her children if something happened but would revert back to the government.

Not strictly true, if the Husband is dead the children receive the survivors pension instead.