Teaching for less than two years, what can I do with my Teachers Pension?

RaeM24

I am a former teacher, I was teaching for less than two years so will not recieve any benefits from my teachers pension.  My contributions amount to approximately £2300.

I moved into a new role, in the civil service, over 12 months ago. I've dropped the ball on my pension and missed the time limit for transferring my pension across to my civil service pension. 

I'm very uninformed on pensions and find them quite confusing, what are my best options for the pension pot that is sat there in my old teachers pension? 

Brie

Presumably you got a refund?

RaeM24

Brie said:

Presumably you got a refund?

I can request the money I contributed back, less tax and NI. I haven't done it yet, but I can. I'm unsure what's the best option and if so what I can do with that money 

Brie

So if they are keeping your money you should be entitled to something at some point.  I would clarify that.  But if a refund is the only option (less likely now than 30 years back...) then I would see about either putting it into a personal pension or do something of value to yourself - like paying off a bit of your mortgage or similar.  Rather than just let life suck it up and it disappear.  When I have a lump sum for something I like to be able to point to what it went to rather than "oh I spent it".  Even a special holiday would be great.

Dazed_and_C0nfused

A refund really should be avoided at all costs.

If you cannot get benefits from TPS or transfer to your civil service pension then the best option is likely to be a transfer to a personal pension or SIPP.

If you compare the transfer value with the (post tax) refund amount you are likely to be pleasantly surprised.

RaeM24

Brie said:

So if they are keeping your money you should be entitled to something at some point.  I would clarify that.  But if a refund is the only option (less likely now than 30 years back...) then I would see about either putting it into a personal pension or do something of value to yourself - like paying off a bit of your mortgage or similar.  Rather than just let life suck it up and it disappear.  When I have a lump sum for something I like to be able to point to what it went to rather than "oh I spent it".  Even a special holiday would be great.

I called Teachers pension last week and they have sent out the forms to get a refund, so hopefully all goes well with that.

I am thinking about putting it into my LISA as I plan on buying my first home very soon so at least I would feel like it's going to something towards my future. Given my age (20s) that's the way I'm leaning, but I have thought about starting a private pension anyway, so I'm going to look into this option as well.

 I just didn't want to go ahead and get a refund if there's a much better option for that money. 

Albermarle

RaeM24 said:

Brie said:

So if they are keeping your money you should be entitled to something at some point.  I would clarify that.  But if a refund is the only option (less likely now than 30 years back...) then I would see about either putting it into a personal pension or do something of value to yourself - like paying off a bit of your mortgage or similar.  Rather than just let life suck it up and it disappear.  When I have a lump sum for something I like to be able to point to what it went to rather than "oh I spent it".  Even a special holiday would be great.

I called Teachers pension last week and they have sent out the forms to get a refund, so hopefully all goes well with that.

I am thinking about putting it into my LISA as I plan on buying my first home very soon so at least I would feel like it's going to something towards my future. Given my age (20s) that's the way I'm leaning, but I have thought about starting a private pension anyway, so I'm going to look into this option as well.

 I just didn't want to go ahead and get a refund if there's a much better option for that money. 

You need to also get a Transfer value ( for transfer to a personal pension) before making any decisions.

Dazed_and_C0nfused

RaeM24 said:

Brie said:

So if they are keeping your money you should be entitled to something at some point.  I would clarify that.  But if a refund is the only option (less likely now than 30 years back...) then I would see about either putting it into a personal pension or do something of value to yourself - like paying off a bit of your mortgage or similar.  Rather than just let life suck it up and it disappear.  When I have a lump sum for something I like to be able to point to what it went to rather than "oh I spent it".  Even a special holiday would be great.

I called Teachers pension last week and they have sent out the forms to get a refund, so hopefully all goes well with that.

I am thinking about putting it into my LISA as I plan on buying my first home very soon so at least I would feel like it's going to something towards my future. Given my age (20s) that's the way I'm leaning, but I have thought about starting a private pension anyway, so I'm going to look into this option as well.

 I just didn't want to go ahead and get a refund if there's a much better option for that money. 

Have you asked about a transfer to an existing personal pension or SIPP?

If necessary you should be able to open one now to facilitate this.

Brie

Given your age I think a LISA is a great way to go.  Others will say it's a great time to start a personal pension.  I understand that because it gives you decades to build your pension pot but that is likely to be possible as well through your work pension by adding extra via AVC (additional voluntary contributions) which are likely to have very low or 0 charges.  

As an idea maybe sling as much as you can in your LISA for 5 years to get a good deposit and then once you have your little dream home start contributing more to a pension somewhere while overpaying your mortgage.  Both will benefit you in the long run.  

xylophone

I moved into a new role, in the civil service, over 12 months ago. I've dropped the ball on my pension and missed the time limit for transferring my pension across to my civil service pension. 

Would the administrator of CSP exercise discretion and allow a transfer in?

Otherwise, as you were considering opening a personal pension anyway, do so and transfer in the TPS?

Universidad

Your options will generally be:

a) recieve a refund of your contributions, minus tax

b) transfer the value of your contributions AND your employer contributions to a new pension scheme

Given that the employer contributions will have been at least double your own contributions, the difference in value between the pension transfer and the refund might be quite dramatic.

You might be looking at a choice between putting 400 pounds into a LISA or 2000 pounds into a personal pension - just as an example (not real numbers).

So definitely figure out what the transfer value is. Opening a LISA is a great idea, but you're not necessarily comparing like for like on value.