HELP, I dont understand Pensions

hyubh

Oliver1191 wrote: »

As mentioned on an earlier post, it's not helpful to compare the financial benefits of different jobs when evaluating whether or not the TP is a good investment option for you.

Talking of the TPS as an 'investment option' is very poor use of language. Opting out will make no sense at all for the vast majority because the employer contribution (+ value of the government guarantee) will be straightforwardly lost (as well as the tax relief of course).

I gave the example of CGI

A rather random one it seems - the list of vacancies shown isn't for anything like teaching.

where they offer other financial incentives in addition to a pension

What, like the share purchase and profit participation plans highlighted at the link you gave...? Clearly irrelevant when discussing teachers.

It is possible for teachers to achieve the 40% tax rate. More so in London. However, this is rare - the majority of teachers I've worked with are usually between M1 and M6

You missed the point - the fact some people get 40% tax relief on pension contributions has nothing to do with the pension option given by their employer, it's to do with tax rates set by government for everyone regardless of occupation.

Around 40% of teachers leave the profession within 5 years, so by default they wont achieve the higher rates of pay. A lot of teachers struggle financially (though not all).

Again mostly irrelevant for assessing the value of TPS membership.

Until recently, I was working with an Assistant Headteacher who had been advised to leave the scheme and invest elsewhere.

By whom?

She wanted other financial assets as she had no intention of working until 68. To be fair, i've yet to meet a colleague who does.

Again, irrelevant to a decision to opt out.

On the other hand, about 4 years ago I was working with a young teacher who was choosing not to pay into the scheme as she was saving to buy a house with her partner.

Unfortunate.

She was low on the M scale, so I felt that she should stay in. She wasn't really interested in investing - for people who aren't the TP is a good safety net so you don't have to worry.

Again, your reasoning ignores the value of the government contribution and guarantee. Being 'interested in investing' and open to investment risk wouldn't justify opting out.

a pension of the value she would accrue would essentially be worthless (because it wouldn't come close to covering her living costs).

Hardly an original thought, but hopefully she's not a maths teacher...

I know that most posters on this thread are strongly in favour of the TP. Although I've offered a different opinion, I am not strongly against it. I am very much in the middle.

I'd stop digging if I were you... The fact you initially thought a private sector employer offering 'matched contributions' was better than (or at least as good as) the TPS does suggest you don't have the handle on things you think you have.

Dox

NoMore wrote: »

I feel sorry for the OP - mcoliver88 - he just wanted to understand his pension and has now been totally derailed by Oliver1191 responding about whether its worth it to stay in the TPS.

Unfortunately that's not what the OP asked and at this stage is probably an unhelpful discussion as the OP doesn't even understand his current pension before he can evaluate whether he should leave (which he hasn't mentioned he's considering btw) and the OP is probably more confused now than he was when he started the thread.

Quite - hence my post above asking OP to tell us what was confusing so that the actual question asked might get a relevant answer. OP, if you haven't lost heart, come back and ask!

Alternatively, contact TPAS for free, impartial help - confused and bemused members of the public are exactly who they are best placed to help. http://pensionsadvisoryservice.org.uk

Oliver1191

I feel sorry for the OP - mcoliver88 - he just wanted to understand his pension and has now been totally derailed by Oliver1191 responding about whether its worth it to stay in the TPS.

Firstly, I would like to apologise to mcoliver88 if the poster feels in this way. This was not my intent.

I hope that when mcoliver88 reads the full thread, the OP will see that I've tried to offer my opinion respectfully. I've also responded to others' thoughts on my position respectfully. Thank you to Jim8888 who said that

...it annoys me when I see people trying to make facetious comments or observations...

. It appears to me that rather than seek learning opportunities so that we can all improve our financial position, some people do not want to hear alternative views.

So, let me give some links for them OP to pursue so that they can better their position.

This is the NUT's page detailing some information on the TP and is useful:
https://www.teachers.org.uk/pay-pensions-conditions/pensions

This is the Teachers' Pension link - there is tons of info on here, so it's well worth exploring it: https://www.teacherspensions.co.uk/members/member-hub.aspx

Hyubh, I would like to respond to some of your points. However as it is encouraging people to either be disrespectful or repeat comments (because they haven't read the full thread), I will leave it for another day.

Hope you all enjoy the rest of the weekend.