Teacher pension

virrvix

I am a 33 year old teacher and have a teacher pension scheme which I pay into. I also pay £50 per month into AVC'S. I have recently opened a stakeholder pension which I also pay £50 per month in and a ISA with the same amount again each month. Would I be better consolidating these payments into just one fund or is it best to spread them around??

Thanks

Sobraon

A little bit OT but relevant I think. The thing to be aware of with the TPS and related additional pension within the scheme is that the resulting pension is classed as a 'government pension'. Hence if you retired to a low tax country (e.g. Cyprus,5%, - or even better TRNC, approx 0% or best of all Andorra really 0% ) then you would not be able to have your pension payed gross and taxed in your country of tax residence. Government pensions are taxed at source so if some future government decided to increase tax hugely for pensioners then 'upping sticks' and moving overseas for tax purposes would have no effect on your pension taxation from the TPS.

I wasn't aware of this tax treatment 25 years ago when I joined the teachers scheme, I probably would have still joined but I would have considered diversifying my pension schemes. Note that both TPS and HMRC will confirm these tax details if you phone them, but its a long way down the telephone 'tree' to get the infor so be sure to DYOR .

EdInvestor

Sobraon wrote: »

A little bit OT but relevant I think. The thing to be aware of with the TPS and related additional pension within the scheme is that the resulting pension is classed as a 'government pension'. Hence if you retired to a low tax country (e.g. Cyprus,5%, - or even better TRNC, approx 0% or best of all Andorra really 0% ) then you would not be able to have your pension payed gross and taxed in your country of tax residence.

There are a few countries where Govt pensions can be paid gross - IIRC Australia Canada - and Cyprus - are on the list.

What is TRNC?

This issue would not IMHO be a good reason to avoid paying into a final salary Govt pension.

Andy_L

Turkish Republic of North Cyprus

Depending on your circumstances it could be an advantage to pay UK rather than local income tax as you'd get to use both your UK & local personal allowances

Sobraon

Once again Ed has better info than me! I rang HMRC non-resident's dept last year and they confirmed by phone that government pensions were always paid after tax. Clearly I should have got it in writing - they did, to be fair, refer me to the individual dual taxation treaties but I did not attempt to read them.

With the list of countries Ed has provided I have found the appropriate section on the HMRC website here http://www.hmrc.gov.uk/cnr/uk_gov_pensions.htm -fantastic thanks Ed!