Teacher Pension Query

MoneySaver241

Hi Money Saving Forum,

I’m new to these forums so please be nice and excuse my naivety. 

Im confused regarding my teachers’ pension. Please can I have some advice from what I can expect?

I’m 34, will have 12 years service in September 2023 and I am planning to retire at around 60 years old (August 2049). 

I currently pay £713 pcm / £8,556 pa towards my teachers pension. My employer pays £1,494 pcm / £17,928 pa contributions. 

Currently my Teachers Pension benefit statement states that my total annual pension amount is: £14,906 made up of the ‘60th final salary’ arrangement amount: £4,621 and the ‘Career Average Salary’ arrangement amount of £10,284. Total death grant £227,196 in service and Total annual family benefit: £5,589. 

With the cost of living in London I am looking at ways to have more disposable income / money for childcare. Do you think I should withdraw from the Teachers Pension Scheme to save the additional £8,556 p/a towards a childcare?

Fortunately, I have been able to pay off my £28,000 student loan, so this is no longer outstanding.

Finally in terms of pension, what can I expect to have as an annual teacher pension amount in the when I retire?

My current salary is £75,732. 

I appreciate I have asked a lot of specific questions above and that there are lots of details to be considered. I would really appreciate all advice so that I can ensure that I do my best to provide for my young family. 

Thanks 

MoneySaverNovice!

Dazed_and_C0nfused

Leaving the TPS would be utter madness.

Your £8,556 is almost certainly only £5,133 after the tax savings.

If you weren't in TPS you would pay an extra £3.4k in tax.

Your contributions are buying you a pension of £1,328 😊.  Which seems to have quite generous inflation protection.

grumiofoundation

No you should not opt out.

You should not even consider it. 

Albermarle

One of the main benefits of working in the public sector, are the very generous pension schemes.
Very few private sector employers offer similar schemes, as they are much  too expensive to fund.

So do not even think about throwing away such a benefit.

Aristotle67

I must echo all of the above sentiments, and I say this as someone who is in receipt of the Teacher's Pension having taken it last year at the age of 55.

It honestly is one of the best pension schemes around. Stay in it and you will enjoy the benefits in due course. Do not come out of it. DO NOT!!

NoMore

DO NOT OPT OUT

xylophone

You do appreciate that your TPS scheme provides protection for your spouse and children in the event of your death?

It is a gloomy thought I know but I shall never forget the case of a young wife who found herself widowed with toddler and infant to care for after her husband met with a freak accident while on duty.

He was a member of LGPS so at least her grief wasn't exacerbated by financial insecurity.

Pat38493

xylophone said:

You do appreciate that your TPS scheme provides protection for your spouse and children in the event of your death?

It is a gloomy thought I know but I shall never forget the case of a young wife who found herself widowed with toddler and infant to care for after her husband met with a freak accident while on duty.

He was a member of LGPS so at least her grief wasn't exacerbated by financial insecurity.

Unfortunately I heard about one story the opposite - the family thought that they would be ok but the person had opted out of the pension scheme without telling them, thereby also cancelling the death in service provisions.

zagubov

No, don't opt out. All the previous posters are correct.
I'm a teacher in London as well.
Can I ask some questions back?
Have you an exit strategy for leaving London or are you familiar with key worker house purchasing schemes?
Because London house prices and key worker salaries are a very poor mix.
Please explore this website and its forum as much as and as soon as you can because you may find that the general tone of advice may be the precise opposite of what you seem to be basing your current decisions on.

MX5huggy

Did someone say don’t opt out? Hope so. 

Seems there’s a good calculator for working out what you will get at retirement. It’s in today’s money so you don’t have to think about inflation. https://www.teacherspensions.co.uk/members/calculators.aspx

VXman

MoneySaver241 said:

Finally in terms of pension, what can I expect to have as an annual teacher pension amount in the when I retire?

  A decent sum in comparison to other pensions!

 It's a complicated question - have you used the calculator on the teachers pensions site?

https://www.teacherspensions.co.uk/members/calculators/estimate-your-final-pension-value.aspx

Definitely do not opt out. You won't get a pension as good at the teachers one anywhere. Not only the tax savings but the employers contribution.  What is your intention to do about your retirement if you opted out? What would you live on when you are 60? (if you retired then)

£14K pension doesn't sound great at the moment but you have another 26 years to contribute yet.