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  • FIRST POST
    • Partaloa38
    • By Partaloa38 16th May 19, 6:24 PM
    • 1Posts
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    Partaloa38
    Should I stay in Teachers Pension?
    • #1
    • 16th May 19, 6:24 PM
    Should I stay in Teachers Pension? 16th May 19 at 6:24 PM
    I am 53 and just secured a permanent teaching position. The question: should I continue to pay into the teachers pension? It is a whopping£250 a month but I have a LGPS pension that I had paid into for 26 years previously which in theory I can take at 55. I know after 3 months I can't get any Teachers Pension refunded so I'm just wondering what the best thing is to do. Any thoughts. I will also have a full state pension when I'm 67.
Page 1
    • hugheskevi
    • By hugheskevi 16th May 19, 6:32 PM
    • 2,227 Posts
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    hugheskevi
    • #2
    • 16th May 19, 6:32 PM
    • #2
    • 16th May 19, 6:32 PM
    The question: should I continue to pay into the teachers pension?
    Yes.

    To turn the question around, why would you even consider opting out of what is widely regarded as one of the best pension schemes in the country - except for very high earners (Annual/Lifetime Allowance issues) or serious affordability issues, there is not going to be any reason to do so.

    It is a whopping£250 a month
    A fraction of the cost of providing the benefit, probably in the region of 30% of the total cost. So the more it costs to be a member, the more the benefit is (excepting the highest earners where things are different).

    I have a LGPS pension that I had paid into for 26 years previously which in theory I can take at 55.
    Consider whether a club or CETV transfer-in to the Teachers Pension would be beneficial for you.
    Last edited by hugheskevi; 16-05-2019 at 6:35 PM.
    • xylophone
    • By xylophone 16th May 19, 6:46 PM
    • 29,468 Posts
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    xylophone
    • #3
    • 16th May 19, 6:46 PM
    • #3
    • 16th May 19, 6:46 PM
    in theory I can take at 55.
    With a substantial actuarial reduction?

    And if you took the pension and continued in full time employment as a teacher you'd almost certainly be paying higher rate tax?

    And you are aware that by opting out of TPS you would effectively be taking a pay cut since you'd lose the employer contribution?

    Consider whether a club or CETV transfer-in to the Teachers Pension would be beneficial for you.
    But remember that while transfers out of LGPS (DB) to a DB or DC Scheme are permissible, transfers out of TPS (DB) to a DC scheme are not.

    And have you checked your state pension forecast?

    https://www.gov.uk/check-state-pension
    • FatherAbraham
    • By FatherAbraham 16th May 19, 6:55 PM
    • 978 Posts
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    FatherAbraham
    • #4
    • 16th May 19, 6:55 PM
    • #4
    • 16th May 19, 6:55 PM
    I am 53 and just secured a permanent teaching position. The question: should I continue to pay into the teachers pension? It is a whopping£250 a month but I have a LGPS pension that I had paid into for 26 years previously which in theory I can take at 55. I know after 3 months I can't get any Teachers Pension refunded so I'm just wondering what the best thing is to do. Any thoughts. I will also have a full state pension when I'm 67.
    Originally posted by Partaloa38
    £250/month is peanuts for what you'll get out of it.

    You should compare it with being in a defined-contribution scheme with an average employer contribution - then you'll be biting your current employer's hand off to join the TPS.
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
    • Dazed and confused
    • By Dazed and confused 16th May 19, 7:54 PM
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    Dazed and confused
    • #5
    • 16th May 19, 7:54 PM
    • #5
    • 16th May 19, 7:54 PM
    Don't forget if you decide to opt out of contributing the £250/ month to this pension you will have to pay up to £150 additional tax each month.
    • ColdIron
    • By ColdIron 16th May 19, 8:08 PM
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    ColdIron
    • #6
    • 16th May 19, 8:08 PM
    • #6
    • 16th May 19, 8:08 PM
    The Teachers Pension Scheme, like your LGPS, isn't just gold plated, it's diamond encrusted. You'd be mad to ignore it
    • Oliver1191
    • By Oliver1191 16th May 19, 8:28 PM
    • 87 Posts
    • 34 Thanks
    Oliver1191
    • #7
    • 16th May 19, 8:28 PM
    • #7
    • 16th May 19, 8:28 PM
    Whilst in the scheme, you also get cpi + 1.6% added every year.

    Invest your excess money in sipps and isas if you are planning on retirement over the coming years.

    Also, if you're new to teaching at 53, you need to keep in mind that you may not survive long. Whilst i personally wish you the best, the reality is that people leave teaching rapidly. Most colleagues i know at that age struggle to keep up with the prevalent over-working culture (and rapidly face capability proceedings). The only real exception is those further up in leadership. It's not in all cases, but i've seen a lot of colleagues suffer with extreme stress if they remain class teachers. So i wish you the best and suggest staying in whilst you can. The opportunity wont come again.
    • justme111
    • By justme111 16th May 19, 9:52 PM
    • 3,278 Posts
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    justme111
    • #8
    • 16th May 19, 9:52 PM
    • #8
    • 16th May 19, 9:52 PM
    As I see it the question does not make sense. Yes the scheme is great but what is right for you depends on your particular circumstances. How much money do you currently live on , when do you intend to retire , how much money will you need when you retire , what pension have you got so far.
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers to difficult choice between two undesirable options.
    I came across so many occasions when people use the word without understanding what it means I decided to use the definition above as a signature.
    • enthusiasticsaver
    • By enthusiasticsaver 16th May 19, 10:01 PM
    • 8,457 Posts
    • 19,527 Thanks
    enthusiasticsaver
    • #9
    • 16th May 19, 10:01 PM
    • #9
    • 16th May 19, 10:01 PM
    Yes I would stay in the teachers pension scheme. It is one of the few DB schemes still left which gives you pension security, you are saving in the most tax efficient way possible and opting out is like taking a pay cut as you will miss out in employers contributions. You also would not save £250 a month as that is taken before tax so it is not actually costing you that much each month.

    Taking a LGPS at 55 will be subject to a reduction so that may not be the wisest option. You should think about what age you want to retire and how much you will need to live off. Bear in mind that taking your pension early will reduce the amount you receive so you might want to think about how to fund the early years if you intend retiring before your NRD.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • zagubov
    • By zagubov 16th May 19, 11:36 PM
    • 16,093 Posts
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    zagubov
    Have you got dependants and a mortgage to pay off? The life insurance that comes with the TPS is extremely good.

    It's difficult to know whether you should transfer your LGPS pension to the TPS as that may depend on how your salary's changing and what your potential salary increases may be in the future.

    It's challenging job, despite many strongly held opinions about its easiness held by people whose heads are emptier than a hermit's address book. Also rewarding. Joining a union may be a way of getting info on what to do with your pension. Deffo look into that.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • atush
    • By atush 17th May 19, 2:55 PM
    • 17,622 Posts
    • 11,141 Thanks
    atush
    Stay in the TPS.
    • Credit-Crunched
    • By Credit-Crunched 17th May 19, 3:26 PM
    • 2,106 Posts
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    Credit-Crunched
    I'll swap, I will pay you £250 and I will take your pension when in payment!
    • Marcon
    • By Marcon 17th May 19, 3:40 PM
    • 955 Posts
    • 734 Thanks
    Marcon
    I am 53 and just secured a permanent teaching position. The question: should I continue to pay into the teachers pension? It is a whopping£250 a month but I have a LGPS pension that I had paid into for 26 years previously which in theory I can take at 55. I know after 3 months I can't get any Teachers Pension refunded so I'm just wondering what the best thing is to do. Any thoughts. I will also have a full state pension when I'm 67.
    Originally posted by Partaloa38
    This question is a prime example of why we need financial education to be taught in schools. I can only hope you aren't going to be responsible for doing so! Seriously, I wish you every success in your new career, but get a grip on just how much a decent pension costs. You've had a sheltered life so far with the LGPS and your trip down Reality Lane is a lot gentler than many of your age.
    • daveyjp
    • By daveyjp 17th May 19, 4:55 PM
    • 8,008 Posts
    • 6,585 Thanks
    daveyjp
    Think of pulling out as accepting a significant pay cut and its a slightly easier decision to make.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 17th May 19, 5:00 PM
    • 6,037 Posts
    • 35,049 Thanks
    Blackbeard of Perranporth
    No wonder that the graduates I get after their education are not financially astute when it comes to pensions if this op wants out of the TPS scam!
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • kinger101
    • By kinger101 17th May 19, 7:04 PM
    • 4,631 Posts
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    kinger101
    Gift horse? Mouth?

    I pray you're not teaching maths or economics.
    • girllikeme1
    • By girllikeme1 17th May 19, 7:12 PM
    • 161 Posts
    • 42 Thanks
    girllikeme1
    I'm shocked when anyone opts out LGPS or TPS.
    • Aretnap
    • By Aretnap 17th May 19, 9:43 PM
    • 3,292 Posts
    • 2,886 Thanks
    Aretnap
    Speaking as a taxpayer, I strongly recommend that you opt out! ��
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