Pension, Final Salary - My Brain Hurts!

Vitor

The Wesleyan adviser's claim is financially correct in raw income terms, but it’s misleading without context. It ignores how defined benefit pensions like TPS can be deferred without loss, and may even be more valuable when taken later, especially if the member doesn’t need the income yet.

That said, if your Normal Pension Age (NPA) for the final salary scheme was 60, and you're now 63, then it's really worth taking a hard look at whether full-time teaching is still worth it.

From what you've said, you're eligible to take your final salary pension unreduced from age 60. That means you've been sitting on at least £9k a year plus a lump sum for three years; you're essentially working full-time without drawing what you've already earned.

Since April 2022, all teachers have been in the career average scheme (CARE). The benefits from that are:

Accrued more slowly (1/57th per year),

Have a later NPA (likely 67 for you),

Can only be taken early with a reduction.

The 2015–2022 service will be covered by the McCloud remedy, which means at retirement you'll be able to choose whether that chunk is treated as final salary or CARE, whichever is better for you. That’s helpful, but it only covers the past. Going forward, there’s no such flexibility.

In plain terms: every year you continue teaching full-time now gives you only a modest increase in pension (and it’s not even payable until 67 unless you take a reduction), while costing you:

Your time and energy,

Income you could be drawing from your final salary pension,

Opportunities to scale back, enjoy life, or retire entirely.

Unless you genuinely love the job or need the money, the case for continuing full-time teaching post-2022 is looking increasingly weak, especially for someone in your position. You might get far better value by claiming your pension now, easing back, or retiring altogether.

peejaydj

Marcon said:

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...

Thanks Marcon appreciated. No I am not saying the advice  Wesleyan they gave was wrong just that I could  not fully understand  in a 15 minute conversation all the technicalities as a mere punter.
Then was thrown into instant doubt by the guy from teachers Pensions saying it wont make any difference whatsoever 60 mins after the previous woman from TP  agreeing with Wesleyan  guy saying that I should immediately sign up for the final salary scheme I didnt know I had to sign up for.
Literally no one ever told me in spite of me asking all over for help......  I have searched through all my past emails and there is zero reference to this  However I `ll own it... my fault for not intuiting better at 60

QrizB

I'm definitely not an expert but this pdf shows there are late retirement factors for the NPA60 final salary pension.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/late-retirement-factors-july-2019.ashx?rev=021df1760dd94dfc8fb9440b714054eb&hash=56B2D04C51CE1348216E44182C479153

peejaydj

QrizB said:

I'm definitely not an expert but this pdf shows there are late retirement factors for the NPA60 final salary pension.

https://www.teacherspensions.co.uk/-/media/documents/member/documents/factors/retirement/late-retirement-factors-july-2019.ashx?rev=021df1760dd94dfc8fb9440b714054eb&hash=56B2D04C51CE1348216E44182C479153

Thank you QrizB   much appreciated.... I  really dont understand a word of this  .... but I guess I will have to become the expert myself (I can read music)  to be honest I am also doubting that others do either (ie my work place or advisers at TP

peejaydj

Vitor said:

The Wesleyan adviser's claim is financially correct in raw income terms, but it’s misleading without context. It ignores how defined benefit pensions like TPS can be deferred without loss, and may even be more valuable when taken later, especially if the member doesn’t need the income yet.

That said, if your Normal Pension Age (NPA) for the final salary scheme was 60, and you're now 63, then it's really worth taking a hard look at whether full-time teaching is still worth it.

From what you've said, you're eligible to take your final salary pension unreduced from age 60. That means you've been sitting on at least £9k a year plus a lump sum for three years; you're essentially working full-time without drawing what you've already earned.

Since April 2022, all teachers have been in the career average scheme (CARE). The benefits from that are:

Accrued more slowly (1/57th per year),

Have a later NPA (likely 67 for you),

Can only be taken early with a reduction.

The 2015–2022 service will be covered by the McCloud remedy, which means at retirement you'll be able to choose whether that chunk is treated as final salary or CARE — whichever is better for you. That’s helpful, but it only covers the past. Going forward, there’s no such flexibility.

In plain terms: every year you continue teaching full-time now gives you only a modest increase in pension (and it’s not even payable until 67 unless you take a reduction), while costing you:

Your time and energy,

Income you could be drawing from your final salary pension,

Opportunities to scale back, enjoy life, or retire entirely.

Unless you genuinely love the job or need the money, the case for continuing full-time teaching post-2022 is looking increasingly weak, especially for someone in your position. You might get far better value by claiming your pension now, easing back, or retiring altogether.

This is an awesome reply Vitor Thankyou!!  I am mulling it..... However I now feel guiltily remiss for not mentioning that   I HAVE  actually been working P/T since age 60 [3 days/week now! perfect  work life balance] (Sooo sorry peeps if that messes up everyones considerate helps Doh! ..   .....it may not however) 
All I really want to know is .. How to I ensure that I dont lose any money (and max the most of what I have put in) before I retire at 67. Why would I need to touch it really. (still feeling very dense, but thankyou all for trying to work me through this )

Vitor

Just to add, if the OP's TPS pension was £9,000 at age 60 that to me indicates incomplete service; someone who spend their entire career teaching would be looking at £20,000+ in pension. The OP would need to figure out of £9,000 a year until State Pension kicks in at age 67 is viable OR they have other pension income from work before starting teaching etc.

peejaydj

Jut found this thread... I`m obvs not the only one   https://forums.moneysavingexpert.com/discussion/6568035/nhs-1995-pension-doesnt-grow-after-60

Vitor

 - All I really want to know is .. How to I ensure that I dont lose any money (and max the most of what I have put in) before I retire at 67. - 

You're not losing money by deferring your pension; your final salary benefits are being increased each year you delay taking them, and you're still building CARE pension while working part-time albeit on less generous terms than before 2022. 

I'd suggest requesting a pension estimate from Teachers’ Pensions showing:
Final salary pension value now vs at 67 AND CARE pension accrued so far and projected to 67
Also ask then to confirm -
Is my final salary pension being increased due to late retirement? Am I still accruing CARE benefits while working part-time? Am I covered by the McCloud Remedy period to 2022, and how will that affect my pension at retirement depending on which option I take?

peejaydj

Vitor said:

Just to add, if the OP's TPS pension was £9,000 at age 60 that to me indicates incomplete service; someone who spend their entire career teaching would be looking at £20,000+ in pension. The OP would need to figure out of £9,000 a year until State Pension kicks in at age 67 is viable OR they have other pension income from work before starting teaching etc.

I have no gaps in service but did not start teaching until I was 42  if that is what you are pointing to Vitor?            Living the life of a poor itinerant musician prior to that (perhaps explains my financial inadequacies!    ) 
I`m going to pick all this helpful advice up later so I have time to pick through with care.....as I need a break so down the pub for my Friday 3 pints!... Thanks again 

peejaydj

Vitor said:

 - All I really want to know is .. How to I ensure that I dont lose any money (and max the most of what I have put in) before I retire at 67. - 

You're not losing money by deferring your pension; your final salary benefits are being increased each year you delay taking them, and you're still building CARE pension while working part-time albeit on less generous terms than before 2022. 

I'd suggest requesting a pension estimate from Teachers’ Pensions showing:

Final salary pension value now vs at 67 AND CARE pension accrued so far and projected to 67

Also ask then to confirm -

Is my final salary pension being increased due to late retirement? 

Am I still accruing CARE benefits while working part-time? 

Am I covered by the McCloud Remedy period to 2022, and how will that affect my pension at retirement depending on which option I take?

Thank you sir, you are a prince amongst men