to opt out of teaching pension?

[ImanIDIOTO]

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

Are you kidding? Despite the changes it's still one of the best pensions around. Youd be mad to not pay into it.

This!!

It makes no difference at all how much my employer is paying in, I’m still only going to get out a pension based on my salary.

I'm assuming you're ECT or similar? If so, it's worth considering that 1/3 of teachers leave in the first 5 years. 5 years of pension contributions to the TPS doesn't get you very much!

If you're considering opting out, then I'm guessing things are tight financially- if you're M1/M2, then things will likely get easier- by the time you get to M4+ it may be more viable to opt back in, and then over, say a 25-30 year career you can still make enough contributions to get a decent pension at the end of it all.

And I think it's very likely in the next 30 years or so, the TPS will end up not being as good as it is now.

However, the other thing to consider is that you'll pay tax, student loans etc on the money you save- it won't all go directly into your pocket.

I really think it depends a lot on your age and circumstances.

It's an indication of how much you would need to save to get an similar sum in retirement tho ie a massive amount.

I have temporarily opted out whilst we have ridiculous nursery bills but by the time auto reenrol happens we will be out the other side. I have paid into it for 17 years already though and will pay additional contributions as soon as possible. It is an amazing pension but we needed additional money now for the short termZ

Your salary and how many years you have contributed,hence,the importance of not opting out thinking you will get back into it at some point.

State pension on its own is great if you want to live on £9k a year (index linked of course), but if you want to go on holiday, run a car, use energy, or eat out once in a while, you’ll need a much bigger pension pot.

You can’t make additional payments into the TPS. There’s no way to make up the years that you have opted out for.

Apart from actually becoming a teacher

Unless you have been in the TPS for years like me you won’t get it until you’re 67. I get partly the old version and partly the new version - old one is paid at 60 and you can take a reduced one from 55. New pension is from 67. Saying that, I still would not give it up.

Unless things have changed, you can make later payments:

www.teacherspensions.co.uk/members/working-life/paying-in/increasing-your-pension/additional-pension.aspx

@BananaGrana you can make additional payments

Paying into a pension should be considered a non-negotiable - call it compulsory if you like.

Unless things have changed, you can make later payments:
www.teacherspensions.co.uk/members/working-life/paying-in/increasing-your-pension/additional-pension.aspx

This refers to buying 'additional' pension, that is, in addition to the main TPS. You can't go back and buy extra years in the main scheme. AND you can only pay £250 a year into the 'additional scheme....which won't buy you very much pension at all, especially as employer's don't contribute to the 'additional' scheme.

No, it’s not. The only thing that matters is the salary, the number of years in the scheme, and the annual accrual rate.

@Tippexy yws that’s how it’s worked out

but the point is that it shows how much it costs to provide that levwl
of pension - so the op is not forgoing just her contribution but also the money the employed is putting in

so it’s not exactly the same as defined contribution -
but it does show how expensive these pensions are and how good value they are

You’re being an idiot. Public sector pensions are so much better than others.

but the point is that it shows how much it costs to provide that level

(Sorry) but it doesn’t. The rate of the employer contribution in defined benefit pensions is entirely arbitrary. It has no bearing whatsoever on the amount of pension the employee will get. It doesn’t matter whether the employer contributes 1% or 100%. It doesn’t show how much the pension ‘costs.’

Ridiculous idea. Opt in from day one. Th LGPS scheme pays in so much more.

It's one of the best schemes you could be in. I wouldn't ditch it in any event.

You can also pay for "faster accrual" which will increase the rate for that year from 1/57 to either 1/50 or 1/45 depending on what you choose. Do that for a few years and it will go somewhere to making up the shortfall of missed years.

Be aware though that if you have years in the final salary scheme, your pension at retirement will still based on your final salary at retirement for those years. And you opt out, your final salary pension may then be based on the salary when you opt out. Even if you rejoin the career average scheme. You will have to check that but I'd be surprised if that wasn't the case.

I am so grateful that my late DH and I were teachers. Paying into the pension was compulsory back in the day, so we had no way to opt out. But now I get half of his pension and all of my own, and I count myself very fortunate. Combined, I have a very decent monthly income for someone of my age.

I recognise that it's not quite as good now (my DD and her partner are both teachers), but still, it's one of the few pros of being a teacher these days.

Terrible terrible idea to opt out. You would regret it forevermore.

The state pension part of DH's pension is eaten up by energy bills of £400 a month, and that includes being utterly stingy with the heating at the moment.

Thankfully we also have a very decent final salary and twenty years of savings behind us.

We I did our homework in the final few years, what we I couldn't have factored in was runaway inflation and the war in Ukraine.

Do not opt out, I can not be any clearer about this.

On the other hand if you ignore the overwhelming advice on here and push on anyway, please do not come back here when you hit pensionable age bleating about how your former colleagues are sitting comfortably.

Up to you, but I know what I would do.

My mum retired early due to ill-health. When she was in her early 80s she went into a care home (dementia). I had deputyship for her (too late for power of attorney). This meant I was dealing with my mum's finances. The difference between the state pension and the teacher's pension (that she'd paid into for decades) was striking. It made the difference between choosing a decent care home for her and relying on the state to offer a place. I'm not saying there aren't great state care homes, but my mum's money meant I had a choice in my area. I think anybody would be mad to opt out of the teachers' pension. Things may change in the future, but at the moment it seems a reliable source of income that it is more generous than many pensions.