Clueless - Teacher's Pension

evie2468

Where to begin?
I have a teacher's pension - not very much, as illustrated below.  I want to retire at 60, so giving me approximately another 15 moths working/saving time.  Can any one recommend the best way to save the most allowed into my pension?  I am doing this as a tax efficiency exercise rather than a saving exercise.  When I retire I plan to take out as much as I can in cash.
Total Annual Pension Amount

(See breakdown below)

£3,728.00

Arrangement	Normal Pension Age	Normal Pension Date	Annual Pension Amount
60th Final Salary	65 years	xx/xx/2026	£1,993.62
Career Average	67 years	xx/xx/2028	£1,734.38

zagubov

You'll be hard-pressed to find anyone here who'll recommend increasing their Tax Free Lump Sum at the expense of their pension due to inflation-proofing, survivor inheritance etc. 
Are  you part time, trying to take one or more pensions with a big actuarial production, including a career average one with no automatic lump sum.
Are you planning to work after retiring, like the happiest retirees do?
Which country are you in? Different jurisdictions may let you take different pensions at different times.

VXman

Put maximum amount of AVC’s into Prudential. It’s tax free so you will gain at least 20% on every penny you put in. 15 months contributions will not make a massive amount of difference to your annual pension though. Have you not been a teacher very long? Or just not paying into the teachers pension scheme very long?
https://www.pru.co.uk/rz/teachers/

evie2468

zagubov said:

You'll be hard-pressed to find anyone here who'll recommend increasing their Tax Free Lump Sum at the expense of their pension due to inflation-proofing, survivor inheritance etc. 
Are  you part time, trying to take one or more pensions with a big actuarial production, including a career average one with no automatic lump sum.
Are you planning to work after retiring, like the happiest retirees do?
Which country are you in? Different jurisdictions may let you take different pensions at different times.

Thanks for the reply.  I think I'm beginning to understand a little more and what you say about not taking a lump sum is making sense.  I am part time, I have worked at a college in Wales for over 20 years but for the first 10 years was not on a permanent contract, so did not pay into the pension.  I do not intend working after retiring, spending my time with the grandchildren and holidays.  I want to increase the contributions as a tax efficient way of saving, better than saving money in a bank account.

stephenadarglas

VXman said:

Put maximum amount of AVC’s into Prudential. It’s tax free so you will gain at least 20% on every penny you put in. 15 months contributions will not make a massive amount of difference to your annual pension though. Have you not been a teacher very long? Or just not paying into the teachers pension scheme very long?
https://www.pru.co.uk/rz/teachers/

One caveat would be the very limited funds you are offered to invest in.

stephenadarglas

............... also there's a risk to your money in a very short timescale.  I also worked in colleges in south Wales.
 

tigerspill

VXman said:

Put maximum amount of AVC’s into Prudential. It’s tax free so you will gain at least 20% on every penny you put in. 15 months contributions will not make a massive amount of difference to your annual pension though. Have you not been a teacher very long? Or just not paying into the teachers pension scheme very long?
https://www.pru.co.uk/rz/teachers/

Why would you do this?
Would it not be better to start a SIPP with a better choice of funds and cheaper fees?  Or go to an IFA?

zagubov

stephenadarglas said:

VXman said:

Put maximum amount of AVC’s into Prudential. It’s tax free so you will gain at least 20% on every penny you put in. 15 months contributions will not make a massive amount of difference to your annual pension though. Have you not been a teacher very long? Or just not paying into the teachers pension scheme very long?
https://www.pru.co.uk/rz/teachers/

One caveat would be the very limited funds you are offered to invest in.

^^^^^^^^^^this. I had an AVC in addition to the TPS pension. I was also paying into the TPS top-up scheme called past added years (sadly no longer available).
After years of thought I stopped paying into the AVC and paid more into the DB pension from then on.
I regret paying into the AVC now. I seemed to be paying in too much for what I could have got much more cheaply from the DB pension.
Of course, one consolation is the AVC is inheritable and can be taken earlier (I think).

OldBeanz

zagubov said:

stephenadarglas said:

VXman said:

Put maximum amount of AVC’s into Prudential. It’s tax free so you will gain at least 20% on every penny you put in. 15 months contributions will not make a massive amount of difference to your annual pension though. Have you not been a teacher very long? Or just not paying into the teachers pension scheme very long?
https://www.pru.co.uk/rz/teachers/

One caveat would be the very limited funds you are offered to invest in.

^^^^^^^^^^this. I had an AVC in addition to the TPS pension. I was also paying into the TPS top-up scheme called past added years (sadly no longer available).
After years of thought I stopped paying into the AVC and paid more into the DB pension from then on.
I regret paying into the AVC now. I seemed to be paying in too much for what I could have got much more cheaply from the DB pension.
Of course, one consolation is the AVC is inheritable and can be taken earlier (I think).

Your AVC can be taken anytime after you hit 55. Use it to retire/wind down early without taking the hit that drawing your TPS would take.

evie2468

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After years of thought I stopped paying into the AVC and paid more into the DB pension 

Sorry, what is a DB pension.  Is this the Teachers' Pension? 

stephenadarglas

Yes - Defined Benefit scheme