TPS - Teachers

Jimmithecat

Thank you JoeCrystal for your detailed answer - very interesting.

I would leave a school and go elsewhere if it stopped offering the TPS.

zagubov

There are thousands of schools (and colleges too) that could still keep you on the TPS. I'd look into shifting to one of them, and quickly too, as many of your co-workers will be thinking the same.

If you start looking now, you could be in a new job by the end of this summer.

Oliver1191

I am a teacher and would be concerned if the employer moved away from tps.

I like the guaranteed income.

However, it may not be all doom and gloom. Firstly, the 5% average annual growth is low...a global tracker fund could average 10% per year over the long run.

Secondly, you may be able to take this new pension at 58 rather than 68. Always worth having different options later on in life.

What i would do is work out your annual spend. Mine's under 12k (not including mortgage).

Then i'd add up your annual income from tps, state pension and lgps if you have one. Where this is in relation to your annual spend should influence your decision. If below, consider moving school. If above, you have options.

Ultimately, you should base it on whether or not you like your employer. Equally, you should have other investments on the side e.g. isa/lisa/sipp and contribute heavily to these.

Malthusian

Oliver1191 wrote: »

However, it may not be all doom and gloom. Firstly, the 5% average annual growth is low...a global tracker fund could average 10% per year over the long run.

That would be a very optimistic assumption. 8%pa (5.5% over assumed inflation) is what the FCA considers to be a "high" assumption. If you were pursuing growth of 10% per year you would also need to use a high-risk portfolio that would be unsuitable for the majority of investors (and the vast majority of teachers), and be prepared to deal with the possibility that your assumptions are off.

Secondly, you may be able to take this new pension at 58 rather than 68. Always worth having different options later on in life.

The DB scheme can be taken early as well, albeit there is a penalty for doing so which you don't get in a DC scheme. The OP hasn't stated their age so both minimum ages might be lower for them.