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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to opt out of teaching pension?

101 replies

ImanIDIOTO · 15/11/2022 17:20

6.5% of my earnings
£190 a month

I can’t afford this - is it a terrible idea to opt out?
State pension kicks in right?
So confused

OP posts:
Workyticket · 15/11/2022 18:09

Teachers pension is literally the only good thing about the "profession" at the minute. It's the only thing keeping me in as I'm on my knees with the whole sorry system

kitcat15 · 15/11/2022 18:09

Mischance · 15/11/2022 17:54

State pension is peanuts. You can add in Pension Credit if you are very poor and qualify - but even with that you would be poor.

A lot of the people who are struggling to heat their homes are on a state pension.

I know it feels like a hell of a big outlay now, but your employer is paying in for you too and that is not to be jettisoned lightly.

There's no pension credit with the new state pension...thats all gone....only with the old state pension

astronewt · 15/11/2022 18:09

Miss03852 · 15/11/2022 18:06

Are you set to inherit money/property? It depends on that really

Nononononono. You never count on an inheritance until it's actually in your bank account. It can go on care fees, it can be left to someone else, it can be a property in an unsaleable condition that's going to take ££££ to put right. Never, ever depend on funding your retirement through inheritance.

Anotherguy · 15/11/2022 18:13

teachers are generally regarded as clever, academic people.

to see one asking this question is frankly astonishing

Nadal · 15/11/2022 18:13

No way opt out. Is there a 50% option like local government scheme? That might help

TwoLeftSocksWithHoles · 15/11/2022 18:14

@SirGawain

'A lesson in life, never let short term considerations dictate long term policy.'

That's good! If only the Government (any of them) would apply this during their tenure we would be in a far better place than we are now...

TheOnlyKoiInAPondOfGoldfish · 15/11/2022 18:16

That would be idiotic TBH. It's one of the best pension schemes, my friends retiring from teaching are happy, warm and comfortably off.

BonnesVacances · 15/11/2022 18:21

In return for that, you will get 1/57 of those earnings paid to you every year you are retired. Your retirement could be for 20-30 years. So from paying £2,280 in pension contributions over this year, you'll potentially get back 30/57 (approx 50%) of this year's salary spread over the course of your retirement. Which is far greater than the 6.5% you paid.

Then next year, you'll make the same contribution and get another 1/57 paid to you every year in retirement. And so on.

Of course you might not live to age 98. But the minimum you'll get back is 5 years of pension, which is 5/57 (8.77%), again greater than the 6.5% you paid. Albeit to your beneficiaries, not you.

Add on to that the ancillary benefits such as the pension that your DP or children would receive if you die, plus a death in service lump sum. And you can see how heavily subsided the Teachers Pension is by the treasury.

I really think we need to educate people about their pensions. We have a huge timebomb coming from people thinking they can survive on their state pension alone and will need untold support from the state. It's frightening.

Apttag · 15/11/2022 18:22

Check what alternative schemes are offered by the scheme, I recently discovered the civil service does a different version of the standard pension a stakeholder pension where you set the percentage you pay in, and employer still contributes something (small in comparison to the standard scheme contribution though).

Death in service entitlement is from your pension not employer, as one of our colleagues partners tragically discovered after their unexpected death in an accident 😥

Ring your scheme to see what the options are.

Iamnotthe1 · 15/11/2022 18:23

Anotherguy · 15/11/2022 18:13

teachers are generally regarded as clever, academic people.

to see one asking this question is frankly astonishing

Lots of teachers will be asking this question if it feels like it comes down to either keeping the roof over your head (and the heads of your children) or paying the pension. It's the wrong thing to do but I can see some teachers feeling like they don't have a choice.

caringcarer · 15/11/2022 18:25

You pay £190 they pay in about 3 times that for you. If you don't pay into the pension school don't pay in for you either. You really will need that pension when you retire. It sounds a long way off but believe me it comes sooner than you know. I'm a retired teacher and get £8.5k a year from 60. I had several years out when my children were small and only worked part time most of career 4 days a week. When I'm 67 I'll also get full state pension. The way things are going you do not want to rely on just state pension.

AriettyHomily · 15/11/2022 18:31

You'd me mad to opt out.

ohfook · 15/11/2022 18:31

I'd get on a salary calculator and work out how much of that £190 you'd actually see after tax and then decide.

Also if you have any dependants the death in service could come in handy too.

saleorbouy · 15/11/2022 18:35

If you are happy living in poverty in your old age then opt out.
If you want to have a more comfortable retirement and a teachers pension to supplement the meagre state pension then stay in.
It's a good generous scheme so I'd stick with it.

Abitofalark · 15/11/2022 18:39

No. Stay in the pension and put your mind to thinking of ways to increase your income, whether by going for promotion or additional school related roles or doing some private tutoring or something else entirely. Also look at your outgoings and see whether you can trim something there.

Georgyporky · 15/11/2022 18:42

I was in a similar scheme - Local Government.
There was no possibility of opting out at the time - even though I was on the breadline.
Eating v. heating is nothing new.

Progression through pay-scales made life easier.

It's worth it in the long term.

TwoLeftSocksWithHoles · 15/11/2022 18:44

BonnesVacances · 15/11/2022 18:21

In return for that, you will get 1/57 of those earnings paid to you every year you are retired. Your retirement could be for 20-30 years. So from paying £2,280 in pension contributions over this year, you'll potentially get back 30/57 (approx 50%) of this year's salary spread over the course of your retirement. Which is far greater than the 6.5% you paid.

Then next year, you'll make the same contribution and get another 1/57 paid to you every year in retirement. And so on.

Of course you might not live to age 98. But the minimum you'll get back is 5 years of pension, which is 5/57 (8.77%), again greater than the 6.5% you paid. Albeit to your beneficiaries, not you.

Add on to that the ancillary benefits such as the pension that your DP or children would receive if you die, plus a death in service lump sum. And you can see how heavily subsided the Teachers Pension is by the treasury.

I really think we need to educate people about their pensions. We have a huge timebomb coming from people thinking they can survive on their state pension alone and will need untold support from the state. It's frightening.

I'm sure you're correct but if Peter had started with three oranges and Mary had two but gave one to her sister (who ate it, pips an' all) then Dennis put all the oranges in a basket, adding one apple, two bananas and a bunch of seedless grapes could Hugo's Mum still make a viable fruit salad? (accepting that there is no pineapple to add to the mix)?

I've done it again haven't I? Wrong thread I guess...

ohthehorrorthehorror · 15/11/2022 18:44

You would be insane to opt out.
I pay into the local government pension scheme. I have a colleague who is a bit older than me at 63 who opted out of the scheme. She desperately wants to retire but can't as she can't afford to. I'm on the same salary and will be retiring at 62 with a good pension. Public sector pensions are to be embraced fully as there are few better.

Cleopatra67 · 15/11/2022 18:45

Terrible, terrible idea. State pension is separate- there’s no connection but the teachers’ pension is one of the few remaining defined benefits schemes. You’d be crazy to opt out. I’m so grateful I’ve got it - I’ll get a 37 grand lump sum and a decent annual pension plus state pension when I’m done.

Murdoch1949 · 15/11/2022 18:48

Good god, never opt out of your pension. Your employer pays more in than you do! The teachers' pension is like gold dust!

Slothsandspiderman · 15/11/2022 18:51

DO NOT DO IT.

I’m retired now but have a police pension - people always go on about how it’s a one of the best and it is. However it was really hard at times. My contributions were 11% initially rising to 12.5% toward the end of my career. Sometimes my pension was more than my mortgage and my car payments. 😳😳.
I had to retire a few years early on ill health. Thank god I stayed with the pension or I would be in shit street now. STICK WITH IT.

Lancrelady80 · 15/11/2022 18:59

Literally lecture number 1 when training to be a teacher was "Come hell or high water, never, EVER opt out of the TPS."

Good advice which I have stuck to.

Isleoftights · 15/11/2022 19:00

Your employer is paying into the Teachers' Pension Fund a sum equivalent to 28% of you salary. So if you are earning 30K, that's £8,400 of 'free money' they are giving to you. I 'm sure they would be really pleased if you opted out and they didn't have to pay that sum.

Tippexy · 15/11/2022 19:10

Please can everyone stop giving the employer contributions as a reason to stay in the pension?

Employer contribution rates are meaningless for defined benefit schemes. It doesn’t matter if it’s 1%, 10% or 100%!

pairofrollerskates · 15/11/2022 19:15

State pension not enough to live on and not reliable - I was expecting to receive it at 60, and didn't get it until 66. Who knows how it will go in the future? Teaching pension is good and and is tied in to teacher salaries. I regret signing mine over to universities pension when I changed jobs. I would have been able to claiming at 60 had I stayed, but then .... (btw, I know 60 is no longer consider retirement age for teachers, just saying how it was for me). Teaching pension currently worth every penny.