Teacher pension - where to go for advice

JCUK

I'm in a very similar situation to you - similar age, same split TPS pensions and pension ages, and similar length of mortgage. My solution has been to start paying into a SIPP and an ISA, with a view to using the SIPP to top up my FS pension to the personal allowance once I hit 60, and then top up some more from the ISA. Both those pots can be run down in the 7 years until I get the other part of my teachers pension and my state pension. It'll be very tight, but do-able I think, and a vastly better prospect than staying in teaching until I'm 67!

Worth thinking about as a strategy, maybe?

louby40

Crv, that’s my problem. I don’t know if my teachers pension will be the full amount at 60 or increase when I reach 67.

Up until 2015 it was a final salary one but now it’s changed so the amounts may be different. Will I get a lump sum at 60 then at 67?

It’s very confusing.

kidmugsy

louby40 wrote: »

I have a very small council pension that I paid into for 5 years, I’m not sure how much it is. I think I’ll get £900 a year from it but would have to check.

(i) At what age is that payable?
(ii) Are you allowed to draw the two separate teacher's pensions from two different ages?

louby40

I’m not in a position to add anything extra to an ISA yet or other investment yet. I still have 2 teenage boys at home and as a single parent I’m solely responsible for bills etc.

I’m currently working on upgrading my house and have just overhauled my kitchen. I need to replace my bathroom and my garden also needs work.

I’m hoping to have those done by 2020 and when I remortgage may be in a better position to save a bit more.

JCUK

You will get a lump sum at 60, and the final salary element of your pension. You can (and probably should) leave the CARE element until you are 67, otherwise it will be much reduced. If you don't take the FS part at 60, though, you lose it (there's no option to defer it and have it increase because of the deferral). If you take early retirement (i.e. Before you're 60) I think you have to take the (actuarially reduced) CARE element at the same time as the FS element.

I'm no expert, by the way - just someone in the same boat.

I understand your confusion. The calculators on the TPS website don't help for those of us who are in both the FS and the CARE schemes. If you read the small print at the bottom of the pension calculation on the website, it explicitly says so. I had to dig about a lot to figure out exactly what was what.

louby40

Further research into my pension folder reveals that I paid AVCs at the start of my career and the plan value totals £3133. I have no idea how to add that to my pension pot.

My local government pension paperwork says I’ll get a lump sum of £2762 and an annual pension of £920 payable Feb 2029

crv1963

louby40 wrote: »

Crv, that’s my problem. I don’t know if my teachers pension will be the full amount at 60 or increase when I reach 67.

Up until 2015 it was a final salary one but now it’s changed so the amounts may be different. Will I get a lump sum at 60 then at 67?

It’s very confusing.

JCUK has answered the lump sum point, you need to find out when the local govt pension pays out, when the AVC pays out and how much it all will be.


Get your figures, get your best estimate of your income needs then sit down with some paper and play around with some figures.


That is what I did and although it's a bit daunting once you start, what seems impossible becomes a plan and then run some figures on here and there's lot of advice and help and as long as it's not pie in the sky you can firm up your plans and make a start!


We've gone from dream to maybe possible to a plan in a couple of months and reading others plans/ journeys got some ideas to copy and fully intend for me to stop work/ finally retire age 60-62 and my wife at 57- 8 years of saving while still living we aren't going to live as paupers to enable us to retire but are taking a what we think is sensible middle road!


Good Luck

louby40

It sounds a bit silly to start thinking about retirement at 48 in many ways, but this year I’ve really begun to notice how tired I am. I’m a very young at heart 48 yr old and certainly don’t see myself as old but I’m middle aged.

I had an operation in the summer and was off work for some time. I loved it. Life is stressful, teaching is hard work and I don’t want to be doing it at 61.

So I need to start thinking ahead and have a plan in place.

I need to contact the Prudentail to find out when my AVCs will be paid out.

Can I put all of these different bits of money together?

kidmugsy

louby40 wrote: »

I need to contact the Prudential to find out when my AVCs will be paid out.

Can I put all of these different bits of money together?

You'll probably find that the Pru expects you to crystallise the AVCs when you take the corresponding pension i.e. the FS one you want to draw at 60. You'll probably be offered a choice of how you want to play it.

It's probably too late to transfer the LGPS to the TPS: often there's only a two year window of opportunity.

But here's a wheeze. Ask the LGPS to quote you a cash equivalent transfer value (CETV). Then you could consider transferring that money into a personal pension of some sort, available at age 55. Even if the availability age were increased by law in the next dozen years it's most unlikely to move beyond 60. So this opens the possibility of using the LGPS CETV to bridge the gap between your pension at 60 and your further pensions at 67. You'd then want to weigh up the relative advantages of (i) the CETV wheeze, (ii) taking the CARE pension early at 60, and (iii) finding some other solution to bridging the gap (e.g. taking a mortgage loan that you could expect to pay off comfortably from age 67 onwards).

Of course if you want to wander a lot at 60, you could let your house for a couple of years - either the big current one or the smaller one you expect to trade down to. Consider also keeping the bigger house and taking a lodger: tax-free rental income up to £7,500 per tax year via the rent-a-room scheme, and you'll have some company around the place.

You could also ask the Pru whether you could transfer the AVCs to your proposed personal pension (though that might be poor value compared to incorporating them into your TPS FS pension). In my own case I did transfer Pru AVCs out to a SIPP (though they weren't TPS AVCs).

louby40

Mugsy great advice but reading it made my head hurt. You know your stuff whereas I’m new to all this pension planning malarkey.

This is why I think I need some expert help.