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  • FIRST POST
    • Horizon18
    • By Horizon18 6th Nov 18, 1:46 PM
    • 3Posts
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    Horizon18
    What do I do
    • #1
    • 6th Nov 18, 1:46 PM
    What do I do 6th Nov 18 at 1:46 PM
    I was going to post this on a hobby forum that i'm on but realised that this place would probably offer much better advice!

    I'm 25 years old and I recently quit employment and started a limited company. I was with the teachers pension scheme for 18 months with my previous employer.

    I plan on having some sort of pension/investment fund going forward and don't know whether to carry on paying in to my teachers pension or find something different.

    As i was employed for less than 2 years, I could take repayment of my pension contributions during the 18 months I was employed, which would be 1300ish minus tax, and the 3k that my employer contributed would go back to them.

    I don't have a great understanding of how pensions work but I gather that if I leave the money in the scheme, I can't get it until I reach retirement age.
    So I don't know whether to keep the 4300 in the teachers pension, transfer it to a different scheme, or take the 1300 minus tax as a lump sum to invest in my business or pay into a different investment scheme.

    What would you do? Thanks for any advice!
    Last edited by Horizon18; 06-11-2018 at 4:11 PM.
Page 1
    • xylophone
    • By xylophone 6th Nov 18, 2:19 PM
    • 27,345 Posts
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    xylophone
    • #2
    • 6th Nov 18, 2:19 PM
    • #2
    • 6th Nov 18, 2:19 PM
    and don't know whether to carry on paying in to my teachers pension
    You cannot continue to contribute to TPS if you have left your teaching job?

    You do not qualify for a deferred pension with less than two years in the scheme?

    You could transfer out into a personal pension and then have your limited company make pension contributions on your behalf?

    https://www.pensionbee.com/pensions-explained/pension-contributions/contributing-to-your-pension-from-your-limited-company?ast=Rqt6l4
    • dunstonh
    • By dunstonh 6th Nov 18, 2:23 PM
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    dunstonh
    • #3
    • 6th Nov 18, 2:23 PM
    • #3
    • 6th Nov 18, 2:23 PM
    As i was employed for less than 2 years, I could take repayment of my pension contributions during the 18 months I was employed, which would be 1300ish minus tax, and the 3k that my employer contributed would go back to them.
    That method is the worst option. Keeping in the scheme, if allowed, or moving it to another pension is nearly always the financially better option. I have seen cases where the transfer value has been 10x higher than the contribution return value.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • kidmugsy
    • By kidmugsy 6th Nov 18, 2:48 PM
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    kidmugsy
    • #4
    • 6th Nov 18, 2:48 PM
    • #4
    • 6th Nov 18, 2:48 PM
    You could transfer out into a personal pension and then have your limited company make pension contributions on your behalf?
    Originally posted by xylophone
    And then if his company flourished he could transfer his pension into, say, an SSAS and use it to help fund the company.
    Free the dunston one next time too.
    • Horizon18
    • By Horizon18 6th Nov 18, 4:16 PM
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    Horizon18
    • #5
    • 6th Nov 18, 4:16 PM
    • #5
    • 6th Nov 18, 4:16 PM
    You cannot continue to contribute to TPS if you have left your teaching job?

    You do not qualify for a deferred pension with less than two years in the scheme?

    You could transfer out into a personal pension and then have your limited company make pension contributions on your behalf?
    Originally posted by xylophone
    Interesting link! Thank you.

    I believe I can use the teachers pension scheme with my limited company, as we are education focussed. I have not checked for certain yet.

    Because I was in the TPS for less than 2 years, I can take my contributions out as a bulk sum (subject to tax).

    And then if his company flourished he could transfer his pension into, say, an SSAS and use it to help fund the company.
    Originally posted by kidmugsy
    Not heard of an SSAS before but i'll read up on it. Thanks.
    • OldBeanz
    • By OldBeanz 6th Nov 18, 9:12 PM
    • 775 Posts
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    OldBeanz
    • #6
    • 6th Nov 18, 9:12 PM
    • #6
    • 6th Nov 18, 9:12 PM
    Do not lose the 3k employer contributions.
    If you can stay in the TPS then do that.
    If not open a SIPP or PP and transfer the funds.
    • wanman
    • By wanman 7th Nov 18, 9:15 AM
    • 30 Posts
    • 15 Thanks
    wanman
    • #7
    • 7th Nov 18, 9:15 AM
    • #7
    • 7th Nov 18, 9:15 AM
    Some of the options discussed above are not available to you according to the FAQs on the web site

    https://www.teacherspensions.co.uk/members/faqs/taking-a-break/leaving-or-taking-a-break-from-the-scheme.aspx

    "The minimum qualifying period for benefits from the Teachers’ Pension Scheme is 2 years service if you were in pensionable employment on or after 6 April 1988."

    "Please be aware that since 6 April 2015 we’re unable to transfer your benefits to a Defined Contribution scheme, we can only make transfers to Defined Benefit schemes."
    • Horizon18
    • By Horizon18 8th Nov 18, 5:24 PM
    • 3 Posts
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    Horizon18
    • #8
    • 8th Nov 18, 5:24 PM
    • #8
    • 8th Nov 18, 5:24 PM
    Some of the options discussed above are not available to you according to the FAQs on the web site

    "The minimum qualifying period for benefits from the Teachers’ Pension Scheme is 2 years service if you were in pensionable employment on or after 6 April 1988."

    "Please be aware that since 6 April 2015 we’re unable to transfer your benefits to a Defined Contribution scheme, we can only make transfers to Defined Benefit schemes."
    Originally posted by wanman
    I'm not sure what either of those statements actually mean..

    I thought "benefits" in terms of the Teachers Pension referred to other benefits on top of the bog standard pension.

    I now know the difference between a DBS and a DCS but not sure how that restricts me in terms of transferring to an SSAS as mentioned above.
    Last edited by Horizon18; 08-11-2018 at 5:27 PM.
    • xylophone
    • By xylophone 8th Nov 18, 5:34 PM
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    xylophone
    • #9
    • 8th Nov 18, 5:34 PM
    • #9
    • 8th Nov 18, 5:34 PM
    "The minimum qualifying period for benefits from the Teachers’ Pension Scheme is 2 years service if you were in pensionable employment on or after 6 April 1988."
    You need to have been a member of the scheme for at least two years before you qualify for a deferred pension (if you leave), or a sick pension or spouse/ dependant pension etc.

    "Please be aware that since 6 April 2015 we’re unable to transfer your benefits to a Defined Contribution scheme, we can only make transfers to Defined Benefit schemes."
    If you have qualified for benefits from the scheme then you cannot transfer out to a DC scheme, only a DB Scheme.
    • kidmugsy
    • By kidmugsy 8th Nov 18, 8:43 PM
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    kidmugsy
    It looks to me that you have no choice but to take the refund of contributions.
    Free the dunston one next time too.
    • xylophone
    • By xylophone 8th Nov 18, 9:25 PM
    • 27,345 Posts
    • 16,359 Thanks
    xylophone
    It looks to me that you have no choice but to take the refund of contributions.
    As he has not yet qualified for benefits in the scheme, (less than two years in it) I think he should check whether he can transfer to a personal pension rather than just take a refund.
    • kidmugsy
    • By kidmugsy 8th Nov 18, 10:26 PM
    • 12,077 Posts
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    kidmugsy
    I thought you couldn't transfer out of TPS because it's an unfunded scheme for government employees.
    Free the dunston one next time too.
    • xylophone
    • By xylophone 8th Nov 18, 10:59 PM
    • 27,345 Posts
    • 16,359 Thanks
    xylophone
    I thought you couldn't transfer out of TPS because it's an unfunded scheme for government employees.
    It is possible for a person to transfer out to a DB scheme but not to a DC Scheme.

    The OP has not yet qualified for TPS benefits as he has under two years in the scheme - it seems to me worth enquiring as to whether in these circumstances he can transfer to a DC scheme rather than just taking a refund of contributions.
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