Teacher pension Top up advice

Nickynoodle

Hello all;
I am a 32 year old teacher, I've been teaching in England for 7 years and have never really thought about pensions, safe in the knowledge that work deals with that for me. I am now thinking that I would like to start investing a bit more for my retirement, I remember that when I joined the teacher pension scheme the Halifax sent a brochure advertising a scheme they ran to top up the teacher pension.
Does this mean that the only way for me to top up my pension is to go with the Halifax?
Or, is it that I can use any pension provider I like but the Halifax is likely to be the best?
Or, is does it mean something else?
Thanks for any help you are able to give.
Regards
Nic

atush

You can open a pension anywhere, with any provider. Have a look at Cavenish online or Hargreeves lansdown.

AVCs can be a good idea if ther is salary sacfice but not sure the TPS ones are.

Other things to think about before increasing pensions is, your mtg rate and LTV. Your emergency savings pot size. And S&S isas. Any spare cash can be split 4 ways some into each.

whitesatin

Might be worth asking for advice from your union.

ExMugPunter

whitesatin wrote: »

Might be worth asking for advice from your union.

Almost certainly wont be though.

Most of our teaching unions are a joke when it comes to pensions.

ExMugPunter

In my opinion you have 2 real options.
That is to buy additional pension:
https://www.teacherspensions.co.uk/members/the-scheme/active-teacher/pay-more-to-get-more.aspx
or set up your own personal pension or SIPP as suggested by atush.

The first option is a decent option. However, for me, I wanted something that is totally independent of the TPS. This is for a few reasons. The first being my main pension is subjected to political risks already. Future Governments are bound to tinker with it despite the changes already in the pipeline. I dont really want them to hammer me twice!!
The second and more important is that I want flexibility. A separate pension (or other savings) means that I am not totally reliant on the TPS. For example, if you want to retire early, you would have to take the TPS early and take a massive hit. If you have seperate provision, you can run this down first and leave the TPS to trundle along unaffected until you need it.

Both options are certainly better than doing nothing, I prefer the extra flexibility (especially with the new pension rules) that a personal brings. I also quite enjoy reading and learning about personal finance, so being a bit more 'hands on' suits me. However, others I know are maxing out additional pension allowances. The choice is yours really.

hugheskevi

There are also going to be more options under the post 2015 schemes, details here.

ExMugPunter

hugheskevi wrote: »

There are also going to be more options under the post 2015 schemes, details here.

Thanks Hughesevi,
Are there any indications as to how much they will cost?

I have had a look through the booklets and can see what benefits we can get, but not what they cost.

atush

I think buying additional pension is only a good idea IF you aren't going to retire early with a reduction. and a PP or Sipp helps you there.

hugheskevi

Are there any indications as to how much they will cost?

Sorry, I don't know much about Teachers' pension, so don't really know.

My guess (and it is nothing more than that) knowing of similar (ish) features in other schemes is that reducing Normal Retirement age (NRA) will work by reducing the NRA for that year of accrual only, and will cost between 1 to 2 percent of pensionable pay in additional contributions per year of reduction (so a 3 year reduction would cost between 3-6 per cent of pensionable pay, probably toward the lower end of that range).

Enhanced accrual is very interesting, as it is really quite similar to Added Pension. The main difference is that the amount purchased under enhanced accrual gets higher revaluation (CPI+1.6%) than Added Pension (CPI), and will also lead to things such as higher death-in-service payments. As such, I'd expect it to cost more than Added Pension, and be better suited for those expecting to remain in the scheme all their career, whereas Added Pension would be better for those who think they may leave the scheme. I don't have much of a feel for how much more than Added Pension it would cost though, but I suspect the difference could be quite significant for younger members (for older members there is less time to benefit from the enhanced revaluation, so the difference in cost between Enhanced Accrual and Added Pension should be lower).

A useful feature of purchasing a lower normal retirement age is that tax relief is available on contributions, but it does not count at all toward Annual Allowance limits, so is particularly attractive for those with Annual Allowance issues.