Teachers Pension

daveyjp

[Deleted User] said:

zagubov said:

I've never met anyone who thinks increasing a lump sum's a good idea unless you've got a serious health condition. We're usually potentially able to outlive our grand/parents.
Maybe check this website to see what future lifespans are typical. https://www.livingto100.com/

Well I did and it worked fine for me! It’s not all about the money. The peace of mind that came from  being mortgage free, debt free and having some savings in the bank surpassed maximum financial gain.
Not everyone manages to save thousands into ISAs or have back up DC pensions. For many the lump sum enables retirement to take place and in my case maximising it made sense.

Using a larger lump sum to pay off debts appears to be entirely all about the money to me.

The lower monthly income is offset by not having to service those debts.

[Deleted User]

The credit card debt was actually quite small and paid off for a clean slate. As I had a high salary the remaining pension was still quite high. Also clearing the mortgage was just a great feeling.

Nebulous2

I was in LGPS, not TPS and by a quirk of transferring I had no automatic lump sum. I had the opportunity to give up pension for a lump sum at the 12:1 commutation rate for most if not all public sector schemes. I chose not to take any, and with a 10.1% uplift to my pension for this new financial year I'm very happy with my choice. I'm sure my old colleagues didn't get 10.1% I've also moved from a 40 year employed position, and that monthly payment has a reassuring familiarity about it. 

That's my choice however, your choice may be different, and be equally valid for you.  

There are several things to consider - first of all it is a bet on how long you will live. The longer you live the more likely you are to be in profit with the pension rather than the lump sum.  Many people underestimate that, as you will have seen if you frequent this forum regularly. 

Then there is do you 'need' the lump sum? If you have a home for it, debt including mortgage to pay off, a commitment to yourself to reward your retirement with a round the world trip, or a new car etc then there is a case for taking it. 

zagubov

Nebulous2 said:

I was in LGPS, not TPS and by a quirk of transferring I had no automatic lump sum. I had the opportunity to give up pension for a lump sum at the 12:1 commutation rate for most if not all public sector schemes. I chose not to take any, and with a 10.1% uplift to my pension for this new financial year I'm very happy with my choice. I'm sure my old colleagues didn't get 10.1% I've also moved from a 40 year employed position, and that monthly payment has a reassuring familiarity about it. 

That's my choice however, your choice may be different, and be equally valid for you.  

There are several things to consider - first of all it is a bet on how long you will live. The longer you live the more likely you are to be in profit with the pension rather than the lump sum.  Many people underestimate that, as you will have seen if you frequent this forum regularly. 

Then there is do you 'need' the lump sum? If you have a home for it, debt including mortgage to pay off, a commitment to yourself to reward your retirement with a round the world trip, or a new car etc then there is a case for taking it. 

This is an important point. Every day you live adds five hours onto your life expectancy; every year adds an extra eleven weeks.

Universidad

Nebulous2 said:

I'm sure my old colleagues didn't get 10.1%

Assuming your old colleagues are still active members of TPS, they'll actually have got 11.7% (on their CARE benefits).

But if you're talking about their pay uplift, rather than their annual pension revaluation, you're damn right.

Nebulous2

Universidad said:

Nebulous2 said:

I'm sure my old colleagues didn't get 10.1%

Assuming your old colleagues are still active members of TPS, they'll actually have got 11.7% (on their CARE benefits).

But if you're talking about their pay uplift, rather than their annual pension revaluation, you're damn right.

I was LGPS, rather than TPS - but the biggest part of my pension, 32/60ths was final salary, so I was talking about their payrise, which would have been more important than the increase in their care benefits in determining their pension. 

Universidad

Nebulous2 said:

I was LGPS, rather than TPS - but the biggest part of my pension, 32/60ths was final salary, so I was talking about their payrise, which would have been more important than the increase in their care benefits in determining their pension. 

Quite right, so you were, my reading comprehension failure.

It is an interesting quirk of the last decade+ of salary supression that the effect it has had on final salary schemes which remained linked to salaries has not necessarily been positive, even for those who have been promoted!

For all my annoyance at the early end to the final salary link in the final salary USS scheme, it hasn't made nearly as big of a difference as it should have, considering my progression over the period from 2015 onwards.

That said, the majority of my annual benefits accrued still sit with the final salary portion from the start of my career, rather than the longer period I spent up to 13 spinal points higher in the new portion! 

When the (capped!) inflation protection on a closed scheme does rather better in real terms than your salary, even including promotion and pay progression, it's a bad look for a sector.