Teacher pension

gambo31

I have put around £30000 into my pensiob pot. Should I keep it in or withdraw it to to invest in property?

hugheskevi

Is taking a large reduction in value of a guaranteed income stream to invest in what may well be an over-priced, and in any event volatile asset with very poor diversification a good idea?

Perhaps in some very specific circumstances, but if you have to ask the question those circumstances are so unlikely to apply to you that the answer is almost certainly not to do anything with the pension.

saver861

gambo31 wrote: »

I have put around £30000 into my pensiob pot. Should I keep it in or withdraw it to to invest in property?

Resource and consider the benefits of the pension option.

Resource and consider the benefits of the property option.

Consider the risk factors to both options.

Decide.

atush

What pot? An AVC pot? Or are you talking you get 30K per annum in retirement? Or is 30K your transfer value? Or would you reduce your TPS pension to get your hands on a 30K LS?

What sort of property would you get for your 30K? At what other costs? You do realise that income and gains from proerpty are taxable, yet pension growth and income within the pension are not?

chucknorris

gambo31 wrote: »

I have put around £30000 into my pensiob pot. Should I keep it in or withdraw it to to invest in property?

We've got 8 investment properties, they have proved to be a very good investment, but I'm 57 now and I don't want the hassle of them later in life, so I'm planning to sell up in about 8-10 years depending on the market. You didn't say how old you are, if you are near retirement age, I would have a rethink, do you really want to the hassle of being a landlord in your 70's (property is a long term investment)?

I am also in the TPS, and I have bought the max allowed of additional pension, very good value IMO.

jem16

gambo31 wrote: »

I have put around £30000 into my pensiob pot. Should I keep it in or withdraw it to to invest in property?

First of all the Teachers' Pension Scheme doesn't have a pot of money. It is a Defined Benefit scheme where your annual pension is based on the number of years service and (at the moment), your final salary.

So what is this £30,000 based on? Is this a transfer value you have been given to transfer out or is this the expected annual pension that you will receive?

Secondly until you reach at least 55 you cannot take anything from any pension, including the TPS so if you are below this age then no you cannot withdraw anything.

If the £30k is a transfer value to leave the TPS, you would have to transfer this to another pension scheme. That in itself would be a very foolish thing to do as the TPS is far more valuable than what you could get by transferring.

If that £30k is what you think you have paid into the TPS over the years, then it has no bearing on a Defined Benefit scheme as there simply is no pot of money.

So perhaps you could give a bit more info on what or where you think this £30k is coming from?

xylophone

If the OP is referring to TPS (an unfunded Public Service Scheme), transferring out will not be permitted after 6/4/2015?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/332714/pensions_response_online.pdf


"The government continues to believe that transfers from unfunded public service defined benefit schemes should be banned. Transfers from funded defined benefit to defined contribution schemes will be permitted and safeguards similar to those in the private sector will be introduced where appropriate."

Even at the moment,


https://www.teacherspensions.co.uk/members/faqs/new-and-active-teachers/leaving-the-tps.aspx

any receiving scheme would be likely to insist on an IFA sign off which might not be forthcoming.

Cardew

chucknorris wrote: »

I am also in the TPS, and I have bought the max allowed of additional pension, very good value IMO.

Was that buying in additional years? - now apparently not allowed - or the current scheme where you buy in an additional sum e.g. £1,000. (£6,200 is max additional pension in 2014/15.)


If the latter could you please give your reasoning why it is good value.

jem16

Cardew wrote: »

Was that buying in additional years? - now apparently not allowed - or the current scheme where you buy in an additional sum e.g. £1,000. (£6,200 is max additional pension in 2014/15.)

He's buying Additional Pension. There was never any maximum for Added Years except when you were only allowed to pay in a maximum of 15% before 2006.

If the latter could you please give your reasoning why it is good value.

Will leave him to answer that although this thread might help.

https://forums.moneysavingexpert.com/discussion/3264296

chucknorris

Cardew wrote: »

Was that buying in additional years? - now apparently not allowed - or the current scheme where you buy in an additional sum e.g. £1,000. (£6,200 is max additional pension in 2014/15.)


If the latter could you please give your reasoning why it is good value.

As Jem said I am buying additional pension, I didn't become a lecturer until after buying additional years had changed to additional pension.

I think it is great value because it compared extremely well to buying an annuity (from a DC pot), which you had to do when I started buying it. The recent pension rule changes do not change my opinion, I wish I could buy more. I only have £6,059 because I started buying the max 3 years ago (over 3 years) when the max was £5,600 and it has grown to £6,059, because you can only buy it in £250 chunks, I can't buy any more.

But I also I like the fact that it is defined, i.e. you know what you are buying, as opposed to AVC's where it depends upon performance. Nothing wrong with AVC's, but a lot of my other investments are dependant upon performance, so I like the diversity and security of buying something defined/known and on good terms.

Cardew

jem16 wrote: »

Will leave him to answer that although this thread might help.

https://forums.moneysavingexpert.com/discussion/3264296

That's an interesting thread, and shows how much things have changed in less than 4 years - predicted interest rates and compulsory annuities etc .

Chucknorris has changed from doubtful, even with compulsory annuities, to an enthusiast for buying additional pension.

Like many of these discussions - not just teacher pensions - if we know exactly how long we will live and inflation/interest rates over that period we could make wise decisions.;)