Pension, Final Salary - My Brain Hurts!

peejaydj

Dear pension braniacs, I`ll try to keep it brief!   
 I am teacher 63 and could have claimed a final salary (1/80th)  pension  and lump sum at 60.  But TBH I am not a big spender, dont really need any extra income just  thinking about retiring  in 4 years at 67 ie. just ticking over ... (the odd beer, holiday etc. ie. not a big spender) .

So I spoke to the expert guy from Wesleyan financial advice  on teams this morning for advice on how to invest my bits of savings etc  ........
First thing he said was "You`ve lost £9k per year the last 3 years" which I can  apparently never get back because I did not apply for the my final salary pension scheme annual which would give an annual£9k right now (there is a lump sum too) 
I was in shock..... felt like an utter mug and  very annoyed no one  at work had told me specifically I needed to  even do this. (I`m  really crap at stuff like this, I find it all mind boggling) 
THEN
I later phoned up teacher pensions directly  this afternoon and was told dont worry about it ...if you don`t need to access it it will just keep building up until I retire it increases with years of service anyway.
So,  Utterly, utterly confused now.... Which one is correct??.. HELP!  (ps. Musician not accountant ha ha! )            Do I lose anything by just sitting on it? or is the Wesleyan guy just trying to sell me some `product`?    Thanks. P.

molerat

https://www.teacherspensions.co.uk/members/resources/guides.aspx

ClashCityRocker1

I think teacher's pension is career average since 2022. 

I'm not at all au fait with Teacher's scheme but usually you can only access your pension by retiring, partially retiring or perhaps leaving the profession and claiming pension. If you are still working FT as a teacher you will be accruing benefits under new scheme but can't access benefits under old scheme while still working full time.

I think!

Hopefully somebody who knows more about the scheme will respond.

Cobbler_tone

peejaydj said:

Dear pension braniacs, I`ll try to keep it brief!   
 I am teacher 63 and could have claimed a final salary (1/80th)  pension  and lump sum at 60.  But TBH I am not a big spender, dont really need any extra income just  thinking about retiring  in 4 years at 67 ie. just ticking over ... (the odd beer, holiday etc. ie. not a big spender) .

So I spoke to the expert guy from Wesleyan financial advice  on teams this morning for advice on how to invest my bits of savings etc  ........
First thing he said was "You`ve lost £9k per year the last 3 years" which I can  apparently never get back because I did not apply for the my final salary pension scheme annual which would give an annual£9k right now (there is a lump sum too) 
I was in shock..... felt like an utter mug and  very annoyed no one  at work had told me specifically I needed to  even do this. (I`m  really crap at stuff like this, I find it all mind boggling) 
THEN
I later phoned up teacher pensions directly  this afternoon and was told dont worry about it ...if you don`t need to access it it will just keep building up until I retire it increases with years of service anyway.
So,  Utterly, utterly confused now.... Which one is correct??.. HELP!  (ps. Musician not accountant ha ha! )            Do I lose anything by just sitting on it? or is the Wesleyan guy just trying to sell me some `product`?    Thanks. P.

You’d hope the teachers pension line gave you the correct information. I’d imagine you are adding 80th’s (unless you have reached the max 2/3rds) and you won’t lose out. You’ll get some proper experts along soon but at least you are looking at the impact now and sure you’re in a good position for when you do retire.

flaneurs_lobster

peejaydj said:

First thing he said was "You`ve lost £9k per year the last 3 years" which I can  apparently never get back because I did not apply for the my final salary pension scheme annual which would give an annual£9k right now (there is a lump sum too) 

I was told something similar about a pension of mine - I chose not to find out if was true because it would be upsetting if it was and there was nothing I could do about it.

ClashCityRocker1

I think it's only true because you are passed 60 and still working rather than retiring or partially retiring and taking pension. I don't think you can access the old pension while still working FT and paying into new pension.

peejaydj

 Thanks all.  Apparently I can access this final salary dosh  if I want to (which I dont) but as you correctly said they stopped FS scheme and it turned to a career average scheme a couple of years back.
I do wonder  the Wesleyan  expert guy was  just saying  (not very clearly) I have lost the OPPORTUNITY to INVEST 3x£9k  ... ie. NOT that I have actually LOST that money for ever??  can anyone clarify?

Marcon

peejaydj said:

 Thanks all.  Apparently I can access this final salary dosh  if I want to (which I dont) but as you correctly said they stopped FS scheme and it turned to a career average scheme a couple of years back.
I do wonder  the Wesleyan  expert guy was  just saying  (not very clearly) I have lost the OPPORTUNITY to INVEST 3x£9k  ... ie. NOT that I have actually LOST that money for ever??  can anyone clarify?

Go back to Wesleyan and ask them to clarify. You're publicly suggesting they might have given incorrect or misleading information, whereas I suspect you have simply misunderstood - and it isn't fair to blame them when you have admitted:

 peejaydj said:

I was in shock..... felt like an utter mug and  very annoyed no one  at work had told me specifically I needed to  even do this. (I`m  really crap at stuff like this, I find it all mind boggling) 

You aren't alone!

Wesleyan's  website is full of useful information so having a browse on that would probably be no bad idea. You can't expect your employer to second guess that they need to tell teachers how to find information...

DRS1

I am sure someone will be able to clarify from knowledge of the TPS.  But I think it may help to put some figures on what the TPS said to you.

Lets say you have 20 years pensionable service in the 1/80ths scheme - that would give you a pension of 1/4 of your final pensionable earnings.  Let's say at 60 your FPE were £36000 then you get the pension figure of £9000 pa.  You have checked and it seems you could have received that from age 60.  You'd have paid tax on it, it would have increased each year it was in payment so net you have probably lost say £23000 of income to date.

If you claim the pension from age 67 the years of pensionable service don't change so you still get 1/4 of your FPE but according to TPS that will have changed.  Hopefully it has gone up.  Let's say your FPE at 67 is £40000 that means you pension will be £10k pa (ignoring the CARE bit).  So that is £1000 more than it would have been at 60 but it is going to take over 20 years to claw back the pension you didn't receive  from 60 (actually a lot more because I left out the 4 years between now and SPA).

I would ask TPS if there is a late retirement factor applied to your final salary pension where you don't take it at 60.  That is the mirror of the early retirement factors they use if you take a pension earlier than NPA.  I bet there isn't if they keep the link to current earnings for working out final pensionable earnings.

You can do the sums with your actual earnings to see what the impact is for you but I suspect the Wesleyan person is right and you should probably be taking that pension.

Of course there are issue about what that will do to your tax bill.  And you get an extra tax code which some won't like.  If it pushes them up a tax band then some people claim it and then contribute an equivalent amount to a SIPP or as AVCs under their workplace scheme.  Something to think about if you don't need the money.

Dazed_and_C0nfused

peejaydj said:

Dear pension braniacs, I`ll try to keep it brief!   
 I am teacher 63 and could have claimed a final salary (1/80th)  pension  and lump sum at 60.  But TBH I am not a big spender, dont really need any extra income just  thinking about retiring  in 4 years at 67 ie. just ticking over ... (the odd beer, holiday etc. ie. not a big spender) .

So I spoke to the expert guy from Wesleyan financial advice  on teams this morning for advice on how to invest my bits of savings etc  ........
First thing he said was "You`ve lost £9k per year the last 3 years" which I can  apparently never get back because I did not apply for the my final salary pension scheme annual which would give an annual£9k right now (there is a lump sum too) 
I was in shock..... felt like an utter mug and  very annoyed no one  at work had told me specifically I needed to  even do this. (I`m  really crap at stuff like this, I find it all mind boggling) 
THEN
I later phoned up teacher pensions directly  this afternoon and was told dont worry about it ...if you don`t need to access it it will just keep building up until I retire it increases with years of service anyway.
So,  Utterly, utterly confused now.... Which one is correct??.. HELP!  (ps. Musician not accountant ha ha! )            Do I lose anything by just sitting on it? or is the Wesleyan guy just trying to sell me some `product`?    Thanks. P.

I suspect it's quite possible that they are both correct.

You may have lost the money you (unconsciously) chose not to take at 60.

But because deferred Teachers Pension will have an annual increase applied each year it will no doubt be a bit more than £9k when you do eventually come to put it into payment. 

But it won't be increasing with any future years service as you are no doubt now in the later CARE scheme for Teachers, at the very least for service after March 2022.

No idea why you think it's someone you work with responsibility to tell you this, it's your pension, not theirs.

What I think you are best off establishing is what happens to the final salary pension that was in theory available in the period from age 60 until you do eventually put it into payment?

Will you receive backdated payments or has that money been lost?

And if you do now put it into payment does that mean you have to reduce your existing working hours to avoid some form of abatement?

peejaydj

DRS1 thankyou so much. I really don`t understand all the ins and outs of what you are saying yet but have copied and will try to work it through so I do.

Dazed & Confused, thankyou also. And you are quite correct about it being my pension and ultimately my responsibility I have been hassling my school since Lockdown, Unfortunately we have had about 4-5 different HR and financial officers in the past 6 years, I asked repeatedly for advice but none was forthcoming  faces change and the issue drifted as life got in the way.. really annoying.
My Union  who I asked for help  were useless and palmed it off saying they dont give advice (they used to)

NOR  even Teachers Pensions themselves!  who never mentioned it... where should I have found this out?

TP have given me two opposing explanations TODAY neither of which i understand (one = dont worry and the other sign up  to the  final salary scheme  (I stupidly assumed I was in already!) aget your annual amount immediately in the space of 3 hours!) ....  neither phone call has been able to explain in a way that I can understand what I should do so I do not lose my money.
So I  obviously do feel quite peeved about my own financial inadequacy however  and am just venting a bit here However .these are professional `expert` organisations  who are  surely supposed to guide and help in exactly these matters? and I am a  mere music teacher.
So  my School  = useless, Union  =useless, Teachers Pensions = useless... and now I feel quite useless too.
(ps. I dont think I will get enough to cross the  abatement threshold. However I am exploring)
Anyway, being a stoic I will cope with it fine.