Should I take my pension

AJP16

I left teaching in April 1997 and have over 17 years of service. I have a job outside teaching, not highly paid and am eligible to collect my teachers pension when I reach 60 this year. My question is - should I take my teachers pension at 60?
I could do with the lump sum and the monthly payment would allow me the luxury of doing less hours or changing jobs. I'm just concerned as to how much of it would be lost in tax.
Advice appreciated.

molerat

How much are you currently earning and how much would the pension be ?
Total earnings and pension income over £11K will attract tax and above £43K will be taxed at 40%.

surbitonian

As above. You need to know what your tax liability would be but as a general rule there would be no real benefit in not taking the pension and adjusting your earnings (if possible) to limit tax liability. Before you splurge the lump sum, consider what it could do if invested for the longer term. Could be worth getting some independent advice.

bigadaj

AJP16 wrote: »

I left teaching in April 1997 and have over 17 years of service. I have a job outside teaching, not highly paid and am eligible to collect my teachers pension when I reach 60 this year. My question is - should I take my teachers pension at 60?
I could do with the lump sum and the monthly payment would allow me the luxury of doing less hours or changing jobs. I'm just concerned as to how much of it would be lost in tax.
Advice appreciated.

If you post some actual numbers people will be able to comment more specifically, and determine whether fewer hours is a justifiable luxury or not.

atush

You can easily open another pension and put any income suprlus to requirements into another DC pension. Which you can take later on.

You live on the teachers bit, and can contribute up to 100% of your earned income into a pension (bearing in mind you put in 80% and the govt will round it up).


AFAIK, the teachers pension does not grow in deferment over pensionable age?

lisa110rry

If it's anything like my pension for working at a northern university, then it will grow a measly 0.014 % per day in deferment. I decided to go for it and pay the 20%. You will not pay NI on it, of course.

atush

I think the USS and TPS are pretty different, but someone who knows will come along soon I am sure.

AlanP_2

lisa110rry wrote: »

If it's anything like my pension for working at a northern university, then it will grow a measly 0.014 % per day in deferment. I decided to go for it and pay the 20%. You will not pay NI on it, of course.

Why is 5.11% per annum measly?

That is way above what my currently active LGPS CARE pension has grown by this year as it has decreased by 0.1% as it is linked to CPI.

hyubh

lisa110rry wrote: »

If it's anything like my pension for working at a northern university, then it will grow a measly 0.014 % per day in deferment.

As AlanP says, that doesn't quite make sense. Are you averaging over a long period or something? Unless you have special rights (e.g. some private sector DB schemes have - or had - underpins), I would expect revaluation in deferment to be linked to official inflation figures, possibly capped, in which case the increase just gone would likely have been nil.

hyubh

AJP16 wrote: »

I left teaching in April 1997 and have over 17 years of service. I have a job outside teaching, not highly paid and am eligible to collect my teachers pension when I reach 60 this year.

Confirm with the administrators (or double check the scheme rules operative in 1997) as to whether you would receive an actuarial increase to continue to defer past 60. If this were the LGPS (for example) an actuarial increase would only be from age 65, however the TPS might be different (more generous), I'm not sure.

xylophone

Confirm with the administrators (or double check the scheme rules operative in 1997) as to whether you would receive an actuarial increase to continue to defer past 60. If this were the LGPS (for example) an actuarial increase would only be from age 65, however the TPS might be different (more generous), I'm not sure.

http://www.pruadviser.co.uk/new_pdf_folder/GENM11732-feb-16-retirement.pdf

"The Teachers’ schemes apply actuarial uplift on late retirement from active service to NPA 65 final salary and career average benefits only. (For the avoidance of doubt, no enhancement is applied to the final salary benefit of NPA 60 members who joined their teachers’ scheme prior to 1 January 2007 (1 April 2007 in Scotland and Northern Ireland, or to any retirements from deferred status)."

The above seems relevant.