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

dunstonh

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

Last one I came across, the refund option was worth around 1/10th of the CETV and transferring it was the no-brainer option.

RaeM24

Universidad said:

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.

Thank you, this is really helpful. I didn't even think about transferring into a private pension, I'm going to consider this and look into private pensions a bit more. 
As I already have a LISA with a fair amount in it for a house, I'm not in desperate need of the money from TPS, I just thought it was my only useful option. 

Marcon

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. 

There is a much better option: transfer the money to a personal pension, as others have already said. A refund will be your own personal contributions, minus tax; a transfer value won't be taxed and will include an allowance for employer contributions. 

Brie said:

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.  

What 'others' are saying is that it is very silly to give up a huge slug of cash by asking for a refund of contributions rather than transferring the full transfer value, which could be many times the value of the refund. OP has missed the boat in terms of transferring into the Civil Service scheme, so a personal pension is the only option, unless OP is planning another job change in the very near future!

Kniphofia7

It's my understanding that you need at least 2 years vested in the scheme otherwise you would be offered a refund of your contributions.

Silvertabby

Kniphofia7 said:

It's my understanding that you need at least 2 years vested in the scheme otherwise you would be offered a refund of your contributions.

Or the much better option of a transfer to another pension scheme.

silvercar

I'm in a similar position with an NHS pension and I've lost the opportunity to transfer it to another pension, as they have a rule that transfers need to be within 12 months of leaving the scheme. Luckily it is only a small amount, or I may be tempted to find any job at all within the NHS for a few weeks, just to link the pension back up to something I could do something useful with.

FIREmenow

Just lost a post I wrote so paraphrasing it quickly now!

Getting a refund would lose you £736 in tax and NI (basic taxpayer in England)

This factsheet confirms you can transfer the value of the benefits (which is more than the contributions) to a DC pension when you have less than two years of service but more than the months.

It also suggests you might get a slightly higher value if a chunk of your service was before April 2022 due to the MacLeod judgement.

Hopefully you have now joined the Civil Service Alpha pension? It really is very good!