Pension Sttaement Help

ricey420

I've just had a look at my pension online. I am a member of the Teachers' SPPA and I ay in roughly £122.38 per month from my salary as I'm part time.


My statement says:


CARE Earnings - What is this?
CARE Pension to date - Is this the pension I have available? Is it the amount I'd receive monthly? Annually?


Sorry for th estupid questions but only took out a pension in the last few years and I am entirely new to it :eek:

Silvertabby

ricey420 wrote: »

I've just had a look at my pension online. I am a member of the Teachers' SPPA and I ay in roughly £122.38 per month from my salary as I'm part time.

My statement says:

CARE Earnings - What is this?
CARE Pension to date - Is this the pension I have available? Is it the amount I'd receive monthly? Annually?

Sorry for th estupid questions but only took out a pension in the last few years and I am entirely new to it :eek:

Forget about your pension contributions - they have no bearing on your actual pension.

CARE earnings = your pensionable salary

CARE pension to date = the annual pension you have accrued to the date of the statement.

JoeCrystal

Why don't you read https://pensions.gov.scot/teachers/about-teachers-pensions/scottish-teachers-pension-scheme-2015

You accrue 1/57 of pensionable earnings in each year which then revalued by Consumer Price Index plus 1.6% as long you are an active member. I am assuming that CARE Pension to date is shown as annual income but paid monthly once you retire on it.

As you are on £20,400 salary, you pay 7.2% of the salary so £122.38 per month in which you build-up 1/57 of £20,400 so accruing a pension of £357.89 for that year.

ricey420

Okay, I am being dumb and just as well I don't teach Maths! But...


If I am contributing £122.38 per month, then I am paying in £1,468.56 per year.


Yet if my pension accrues at 1/57th then that's £357.89 for the year. So where's the other £1110.67 that I've paid in?! Surely that's wrong?


My CARE Earnings are around £4,000 less than what I actually earn, but I'm aware that's an average so that's fair enough...

Marcon

ricey420 wrote: »

If I am contributing £122.38 per month, then I am paying in £1,468.56 per year.
Yet if my pension accrues at 1/57th then that's £357.89 for the year. So where's the other £1110.67 that I've paid in?! Surely that's wrong?

But the pension you receive isn't a one-off; it will be paid year after year until you die...and it will increase in payment....

You really do need to read your scheme booklet and get a better grasp of this excellent benefit. If you're still stuck give TPAS a call and they will explain - free, impartial and expert assistance: http://www.pensionsadvisoryservice.org.uk

Asghar

ricey420 wrote: »

If I am contributing £122.38 per month, then I am paying in £1,468.56 per year.

Yet if my pension accrues at 1/57th then that's £357.89 for the year. So where's the other £1110.67 that I've paid in?! Surely that's wrong?

Do you expect to live for just one year when you start receiving your pension?

From what you say your pension will pay you £357.89 per year in retirement, thats for the rest your your life. So after just over four years (£1468.56/357.89), you will have received back everything you have paid in and then what you receive after that for the remaining years are a bonus.

JoeCrystal

ricey420 wrote: »

Okay, I am being dumb and just as well I don't teach Maths! But...


If I am contributing £122.38 per month, then I am paying in £1,468.56 per year.


Yet if my pension accrues at 1/57th then that's £357.89 for the year. So where's the other £1110.67 that I've paid in?! Surely that's wrong?


My CARE Earnings are around £4,000 less than what I actually earn, but I'm aware that's an average so that's fair enough...

It is a Defined Benefit scheme, your money go to the current teacher's pensioners with a top-up from the Treasury. You got a guaranteed full pension income from your SPA or reduced pension from 55 for life. So it will only take four years to see your contribution back and any more is free money. It is a very generous scheme compares to other pension schemes.

ricey420

Marcon wrote: »

But the pension you receive isn't a one-off; it will be paid year after year until you die...and it will increase in payment....

You really do need to read your scheme booklet and get a better grasp of this excellent benefit. If you're still stuck give TPAS a call and they will explain - free, impartial and expert assistance: http://www.pensionsadvisoryservice.org.uk

That's a good point, so if I live for 20 years then I receive £7,157.80 - even though I've paid in (roughly) £5,000. That makes more sense...



Yeah, I'm planning on taking advice but was hoping you knowledgable people could give me a little bit of a foundation first:j

Silvertabby

ricey420 wrote: »

That's a good point, so if I live for 20 years then I receive £7,157.80 - even though I've paid in (roughly) £5,000. That makes more sense...

Yeah, I'm planning on taking advice but was hoping you knowledgable people could give me a little bit of a foundation first:j

It's even better than that.

Based on just one year's service /pension contributions, you will have paid £1,468.56. In return, you will get an annual pension of £357.89. Live for 20 years in retirement, and that's a return of £7,157.80 (plus cost of living increases).

Dazed_and_confused

And don't forget that if you are earning c£20k then paying £1,468 in pension contributions will mean you have probably paid £293 less tax than you would have done if you weren't in the pension scheme.

So the real cost to you is only £1,175.