Teachers pension and part time

[carrottopper]

I was full time for 12 years and have a pension frozen from this time as pension changed. I had a statement to say the first pension is worth around £7k a year and my current pension is worth around £3k.

I work 0.4 at the moment. Will this £3k increase, or is that an estimate to what I will receive if I carry on on 2 days??

Also will I receive a state pension if I am not paying tax now on 2days work?? I'm 39

Can anyone help?

You will get a state pension, although how much that will be depends on political sentiments at the time.

I imagine that you're on a career average scheme? The statement shows what you should get if you go to retirement should everything stay as it is now (hours, pay etc). However inflation will change that amount, however relatively you'll get the same if that makes sense?

To many howevers in that last sentence - hope you're not an English teacher!!!

Sorry, just to clarify a bit. The £3k will rise as you'll have had more years in, therefore be entitled to a bigger fraction of your career average salary.

Is the £3k your projected pension? In which case they're assuming you continue on the same hours as now until retirement.

You accumulate sth like 1/57 of your income for every year in retirement. For example, if you're getting 15k per year now, for every year worked you'll get £265 more annually in retirement. It also gets adjusted for inflation etc. That's how it works roughly speaking. If you'd like sth more detailed and accurate then you need to speak to TP. You could also consider doing top ups so it accrues faster.

Thanks.
Top ups? Can I top up with different amounts each month like I would with overpaying a mortgage? E.g. £40 one month, £70 another month

I doubt you could just top up whenever. I think it needs to a be proper amount, set up on the system and done over the long term. However, whe you go back for more days a week, you will accumulate more pension for the future.

If you feel like you might have a little more money to set aside but can’t commit to a particular monthly amount, you could consider a Lifetime ISA instead. You must start before turning 40. You will get a 25% top up for the amount you put in, up to 4k a year. You’ll be able to withdraw after age 55 and it’ll be tax free.

With regards to state pension, noone has a crystal ball. I think the age is going up to 68 soon and who knows what will happen in almost 30 years? Some people predict it might not exist.

Interesting point about the lifetime isa. I have a mortgage on a second property which I rent out.

I have 3 options:

1. overpay on mortgage so it will be paid off when 60
2. top up teachers pension
3. set up lifetime isa.

What would you do?

Carrot, you'd need someone clued-in or an IFA to go over the numbers for you.

If in UK look HMRC website at pension calculator it will show you how much you have already paid and your estimated amount to be paid in your retirement