Teacher phased pension

DRS1

Morsing_2 said:

DRS1 said:

Morsing_2 said:

Thanks, that would make more sense. You made it sound like for two years she'd be paid £7 500 alongside her part time salary and when she then retired fully, she'd be paid £2 500.

However, I do not get what you describe from the "guide" they put in the form.

Thanks for the Facebook hint, will try that.

With a DB pension scheme like TPS when you take your pension it is paid for life.  And when you die your surviving spouse or civil partner (if any) gets a (smaller) pension for the rest of their life.

It is quite different from a DC pension where you maybe drawdown an amount until the pot runs out.

No, this is one of my gripes when people talk about pensions. What yuo describe above is a savings account, not a pension. Pensions do not run out. It might be a "pension" savings account, but it's still a savings account.

You clearly don't believe a word I say so have a look at 
Defined contribution pension schemes | MoneyHelper and 
What can I do with my pension pot? | MoneyHelper
I'll let you find the bit which says your pot can run out for yourself

DC pensions are not the same as DB pensions.  Pension freedom means the freedom to spend it all at once instead of spreading it over the rest of your life.

zagubov

Thius isn't advice but it might be that your wife has missed out on one retirement option but still has other ones. If your wife has looked into this too late to do phased retirement (as she cut down her working week in September which is over three months ago) and she has already reached the age of 60, she has other options she can look into.

She is likely to be in at least two different pension schemes and she can collect them separately.. The Final Salary 80 scheme  can be taken at the age of 60. It comes with a compulsory lump sum which can be increased if needed ( but this will permanently reduce her monthly pension).

She can take all of this by opting out of the pension for a month (her school cannot refuse this). Then she has to fill in a form to collect this pension. There is no reason to delay doing this - it does not increase by her working longer ( unless she is expecting a spectacular promotion in the immediate future).. Also if she doesn’t claim it now they do not save it up to give her the unclaimed part later.

She can opt back in one month later and would then need to keep adding to her Career average pension. She needs to continue doing this for at least 12 months but as you’ve said she wants to work to 62 so that’ll be fine.

If she wants to take this second pension she can take it when she leaves teaching (but it will be reduced as she’s taking it longer, which is fair and reasonable).

She could delay talking it until state pension age which is probably 67 and then it will not be reduced. This second pension will not be as big as the final salary one as she’ll have been paying into it from about 2022.

She may want to take out extra life insurance temporarily as I think the pension scheme life insurance is reduced until she has been back in the scheme for at least 12 months.

All in all this could make her financially better off than if she was taking phased retirement.

She will have to check up what to do about her options for the transition years 2017-2022. There are online guides availabe via the facebook page - she should read these as soon as possible.