Teacher pension

Nebulous2

For me its not just the reduction for taking it early - it's the fact I'm not building it up further as well.

Pension accrued so far £20k. Going up at just over £800 a year. Taking it 3 years early gives an actuarial reduction of 5% per year making a pension of £17k. Staying in for the 3 years raises the pension by £2.5k. So first year now would be £17k but first year in 3 years would be £22.5k or £5.5k more.

Sonatine

I am in an almost identical position to you, and you will have membership in the old scheme and the new scheme. Trying to find information about exactly how it works is tricky. If i've worked it out correctly, when you're 60 you are required to take your earlier pension - you get full credit for it. I don't think you can delay this to get more. You can then allow the 2nd portion of pension to be deferred until you choose to take it. The longer you wait until 67 ( or 68...) you take less of a hit, but of course don't have the income, so you have to make a judgement based on circumstances at the time I guess! There are actuarial tables on the TPS website, if you search hard enough. If you take the pension before 60 (which you aren't proposing currently), then you are required to take both parts at the same time, so would take a bigger hit. So your plan of another pension to tide you from 57 to 60 is the way to go. An option to have a look at are the teachers AVCs (prudential) as these can be drawn from 55 I believe (currently...), and I think they have lower costs compared to other schemes. I don't think you can buy added years as you propose to cover 57-60, as this is no longer an option except for those protected in old scheme, also if you buy within TPS (faster accrual, additional pension) you would need to draw the pension before 60 and would have to take a hit on both old and new pension. Not advice btw - am trying to navigate this mire myself at the moment, it is confusing.

zagubov

Nobody makes it easy to find out how to get the money. The TPA website itself is a bit complex, and private pension companies can tell you more quite clearly. If they come to you school, go to one of their promotional talks where they'll usually answer questions.

Your union may have more info.
To be honest, there should be a really neat summary sheet on your options somewhere, but if there is one I've never encountered it. It shouldn't be beyond the wit of man or woman to put together a flow-chart of the options.

Have you considered going part-time when you're older? I mean taking some of your pension money and doing a couple of days work a week to add to the pension.

I read recently the happiest retirees are those that go back to work (even if part-time) especially if it's familiar work.

If you were on the original version of the pension, you may get a lump sum. You could take that and part of your pension (I think about half).

I think you can start to do that before your Normal Retirement Age, and I think your employers can refuse for a while but are eventually obliged to agree to allow it. Your pension could be capped if you end up earning more than your full-time pay. But you should check everything I say with your union.

You can take your pension early and take a different better-paid job afterwards, as long as there's a gap between finishing one job and the start of the next. That way, your pension won't be capped, (but it will be actuarily reduced because you took it early).

atush

havingaball74 wrote: »

Thank you! I understand now. How do teachers fund that gap? Are added years better or setting up a SIPP?

Many would open a Personal pension. Added years are good if retirening at scheme age, but not much point in buying them if you are going to take an actuaria reduction for doing so (at say 57 or 60).

S&Sisas are also good.