55 early retirement

level200

Hi everyone

I have 2 private pensions. One is small and the other regular teachers pension. 

I turn 55 soon and want to retire early and move into a campervan full time and explore whilst I can.

Question is: I'm hoping to take out all of the smaller pension and a lump of the teachers pension, leaving a small amount for monthly pension.

What is the best way to do this?

Transfer the smaller into the teachers?

What about the 25% tax free amount? Which pension should I take that from?

Can I claim back and tax paid on the rest?

Hope you can help.

MallyGirl

Hi

I think you need to do a bit of reading up. The teachers pension will be some form of defined benefit based on salary/years of service - it is not a private pension. It is not a pot of money and you cannot just transfer the other small DC pension into it. There will be some form of lump sum with the teachers one but not necessarily 25% - it will depend on the scheme rules.
If you take the teachers one at 55 it will be significantly reduced for the rest of your life - can you not delay that until the DC one is finished up?
The DC one will be 25% tax free and 75% taxable at your prevailing rate so added to the current year's earnings.
Without actual numbers it is difficult to comment too much

Dazed_and_C0nfused

level200 said:

Hi everyone

I have 2 private pensions. One is small and the other regular teachers pension. 

I turn 55 soon and want to retire early and move into a campervan full time and explore whilst I can.

Question is: I'm hoping to take out all of the smaller pension and a lump of the teachers pension, leaving a small amount for monthly pension.

What is the best way to do this?

Transfer the smaller into the teachers?

What about the 25% tax free amount? Which pension should I take that from?

Can I claim back and tax paid on the rest?

Hope you can help.

It looks you have misunderstood your Teachers pension.  Assuming that this is the normal Teachers pension scheme then you have two totally different types of pension.

One is a defined contribution pension, basically a pot of money you can normally use as you see fit.  You can take a 25% TFLS and all the taxable element in one go.  Or take 25% TFLS and leave the taxable element to be taken later.  Or take payments which are split 25% TFLS and 25% taxable income.

The Teachers pension will be a defined benefit scheme.  There is no pot of money, you get a pension (and possibly a tax free PCLS) based on the scheme rules.

You may be able to start the teachers pension now, there would be no "penalty" for doing that (if the scheme rules allow it) but your pension would almost certainly be quite significantly reduced as you are asking for it be paid for at least 5 years more than it would normally be paid for.

If the schemes normal pension age is 60 then you could be looking at a 20-25% reduction.  But the reduction is purely because you have chosen to have it paid for an extra 5 years.

There are usually time limits when existing DC pensions can be transferred into a DB scheme so unless you joined the Teachers scheme recently that is unlikely to be an option now.

Can I claim back and tax paid on the rest?

Don't know what you mean by that?

Linton

What happens when you get too old/infirm or bored to carry on living in a campervan?  Have you worked out the numbers? Do you own your pwn home?

dunstonh

Transfer the smaller into the teachers?

You cannot.

What about the 25% tax free amount? Which pension should I take that from?

The teachers pension doesn't have 25% TFC.   There will be some tax free cash available but it will be a sacrifice in the income to pay it.

The rest of your questions are not possible to answer without specifics.  

Dazed_and_C0nfused

dunstonh said:

Transfer the smaller into the teachers?

You cannot.

What about the 25% tax free amount? Which pension should I take that from?

The teachers pension doesn't have 25% TFC.   There will be some tax free cash available but it will be a sacrifice in the income to pay it.

The rest of your questions are not possible to answer without specifics.  

I think the op has been in TPS long enough to get some automatic PCLS, under the 80ths + 3x pension as PCLS version of the scheme.

They asked about TPS over ten years ago and already had a chunk of service then.

Tucosalamanca

Linton said:

What happens when you get too old/infirm or bored to carry on living in a campervan?  Have you worked out the numbers? Do you own your pwn home?

A very valid point. In the short term an address will be needed for insurance. It's also important to look in to full-timers insurance and what that entails.
Other essential things to consider are what happens when the van inevitably needs repairs (where will you stay) and making plans for van replacement in the future.
Little worse than heading in to old age with a vehicle that is no longer road worthy or liveable, no funds for replacement and no home to fall back on. The internet (and in the 'real world') is full of stories where this is the eventual outcome. Not to mention the potential for health issues.
There's a lot of careful planning required. The general view is keep a base in the UK if at all possible.
Not only for insurance but to always have somewhere to fall back on when issues inevitably arise.

*edit*
It's also worth mentioning that many people change vans quite quickly after purchase, as they realise that the layout isn't right for them. 

And possibly most important of all, has OP lived in a van full-time before?
I'm in my 22nd year of part-time van life, currently doing 80-100 nights per year in UK and Europe.
While I look forward to retiring and spending more time in the van, I'm not sure that full-time is right for me.
It's a massive commitment / lifestyle change and not something that many can make work.
Winters are hard work even in southern Spain or North Africa, dare I say an endurance test if staying in the UK.
Don't believe any #vanlife social media, they all have an agenda (hits/money/likes) and simply don't tell the truth.
Think (and plan) very carefully before burning any bridges....

Albermarle

OP - Retiring at 55 is pretty early. Of course some people do and some even earlier, but it means you have to plan very carefully as you may well live for another 40 years. Normally you need a pretty big warchest to retire even reasonable comfortably at that age. OK it helps if you have a frugal lifestyle, but it is still a long time not earning.
Plus if you come back to the UK at some point and have to rent a flat, then will be difficult.

Triumph13

The replies you have had so far are rightly cautious, but it might be possible to achieve your dreams if the numbers stack up.  The key questions are:
Do you already own a home with a paid off mortgage?
Have you already accrued enough pension in the teachers scheme to meet your long term needs in retirement?  Even if you take it early?
Do you already have the money to buy a suitable van?

If the answer to those is yes, then there might well be a solution where you buy the van, rent out your home, and live frugally on the rent plus funds from the small pension, until you can afford to take the hit for taking the teachers pension early.  That way you still have a home to come back to if travelling palls.

xylophone

Have you obtained a state pension forecast?

https://www.gov.uk/check-state-pension

Re TPS

https://www.teacherspensions.co.uk/members/planning-retirement/types-of-retirement/early-retirement.aspx

louby40

've transferred a decent sum from a LGP into my teachers pension recently but I had to do it pretty quickly because of time constraints under the McCloud judgement. You may have missed the opportunity now but check.

Also, please join Teachers Pensions - Teachers to Teachers (U.K.) over on Facebook run by the amazing David Fountain. There is a wealth of information and support on there. He has made spreadsheets that can predict your pension amount if you take it early.

Its a great community.