Teacher Pension PLUS state pension?

[starchildmum]

Hello

I was wondering if I will get teachers pension AND state pension?

My state pension forecast estimates currently £99 per week on the government website. I have paid NI contributions for many years.

For my teachers Pension, I had opted out for some years, but opted back in and currently accumulated £ 3000 annually ( around £ 2000 from the previous final salary scheme and 1000 from the average salary scheme)

Does that mean my annual 99£ x 52 week will be 5148 PLUS 3000 annually ( if I stopped working now without any additional built up?)

Thank you!

Yes, you can have both and may well get to full state pension.

For example, you accrued years whilst in the 6th Form at school but not whilst at uni studying, although if you had a job and worked enough hours you could get those years too.

The state pension forecast sheet is pretty confusing especially when it refers to COPE and you start wondering if any amount for COPE will be subtracted from your state pension. It won’t. The key figures are those it tells you you have accrued and the no of years you still need to pay to get to the full 35 years. For most people, they won’t have to work until 68 to have paid the 35 years so if they retired a bit early, they would still get the full state pension when reaching state retirement age, if they are currently in their 40s or younger. Even having contracted out in teacher pension, middle aged people often still have another 20 years before state retirement age to build up NI contributions.

The teacher pension you’re in, if you were in it prior to 2015 can revert to final salary until April 2022, due to the McCLoud ruling against age discrimination. We’re you in the teacher pension before 2015 and have you remained without a break of more than 5 years since then? If so, the service accrued by April 2022 (equivalent of full time years) will give you a final salary pension base on the full time pay when you retire index-linked for that period to 2022. It’s called the final salary link. It is good and also gives a lump sum if you were in pension before 2007.

Pension earned after April 2022 will be career average pension accruing at 1/57 of your yearly earnings. It’s still very good. You could choose to accrue at a faster rate if you wanted by paying in more.

Definitely get online accounts for the state pension and the teacher pension schemes and you can see exactly what you’ve accrued and are projecting towards.

@Hazelnut5 high five 🙌🏻 for the forecast check link 👍🏻

Would people please stop saying there won't be a state pension in 20 years. It's already the lowest in Europe. Stop settling for nothing.
People pay NI for their state pension. Why the hell shouldn't they get it?
We pay 20-50% tax on income, then we pay an additional 20% tax on everything we buy. We also pay around 13% of our income on NI.
We pay tax on property, on flights, on savings, on investments.
We pay thousands to our local councils for local services.

Give your heads a wobble people! £170 a week when you are too old to work is the f**ing least you can expect for that lifelong contribution. You don't see the 800+ members of the House of Lords wringing their hands trying to give back their £3-5k monthly expenses, do you??

@DianaT1969 nobody is saying that anyone is trying to give it back!

They are very sensibly considering that the State Pension as we know it may not exist in that form in 20 years time.

Prior to the 2010 Act just 10 years ago, how many people expected their SRA to go from 65 to 68? (I’m not sure when the consultations and white papers started before the Act, but I doubt 10 years before - so it’s in the 20 year time frame.

Will we still have the triple lock in another 20 years?

Will we see a reduction in SP if you have a private pension? Or simply means tested?

Will the SRA increase beyond 68?

Will there be reforms to the number of qualifying years (why not, it’s happened already)?

I personally don’t think that the state pension would simply be withdrawn - certainly not for those starting to claim in the next 20 years. It’s electoral suicide, leaving aside any morality with regards to NI already paid.

But it would be foolish not to consider that changes could devalue the current pension expectation. For those that can, they should absolutely plan as if there will be nothing - and then re-adjust their planning when they get close enough in age that they’d be unlikely to be impacted by new legislation.

And by saying all that, I’m not saying suck it up... campaign, vote... but don’t assume anything will be there.

There will always be a state pension simply because otherwise people without any income or with insufficient income would be classed as unemployed and the government doesn't want those figures to rise.

@hollowtalk the difference may be - the age you start getting it, how much you get etc.

I agree we should resist the erosion of it, but at the same time on a personal level I am planning to not rely on having it.

Yep I'm not saying I want it to go...just that as a tax advisor we need to be prepared to give clients realistic advise. The state pension won't just go poof but they might taper it down depending on how much you have in your workplace pension/your age etc, obviously we don't really know at the moment but people need to be prepared for this too happen. At the end of the day there is a reason the government have pushed workplace pensions with minimum contributions that will continue to increase.

Or maybe me and all the other accountants I have spoken to about this are just very cynical

People pay NI for their state pension. Why the hell shouldn't they get it?

Because in my case the amount of ESA I receive is reduced because of a pension, my ESA is contribution based (I have a 'full' record on NI) so as far as I'm concerned I have paid in so I should receive it, but I don't.

If they can do it to one NI based benefit then what is to stop them doing it to another?

Unfortunately, teachers are not entitled to full state pension as they have been contracted out of SERPS. Not sure what percentage they get but it won’t matter how many years NI you’ve paid, if you’re a teacher you won’t get full state pension.

SERPS is different.
The new state pension is based on your qualifying years of NI contributions.
Check this carefully as some people who are late 50s have to have 40 years of NI contributions.
Use the gov gateway to check this.
Does serps even accept new people now, or has the concept of the workplace pension that everyone who is employed must now pay in to.

@BBCK

Unfortunately, teachers are not entitled to full state pension as they have been contracted out of SERPS. Not sure what percentage they get but it won’t matter how many years NI you’ve paid, if you’re a teacher you won’t get full state pension.

That’s not true any more. It all changed with the reforms in 2016.

Re SERPS, as I understood it, if you were contracted our at any point before 2016, your state pension will be reduced. I was contracted out of the NHS for a number of years, and then of course contracted back in with the reforms. My state pension forecast is lower than it would have been otherwise as far as I understand.

Teachers who retired up to and before 2016 probably didn’t get the full state pension due to contracting out. However, the younger people are, the more years they have to top up any missed years before retirement and reach the full amount since 2016.

My state pension forecast says I need to contribute for another 9 years to reach full state pension. There are more than 9 years remaining before I get to that age. That means if I work the next 9 years and then retire early I will still qualify for full state pension. Or if I work a bit and have a break and then work again I will still easily get there as well as having my teacher pension. If I only work perhaps 5 years more, I can still get to full state pension by buying the extra years. Currently they cost about £750 for a year and that buys you about £5 Per week in state pension which is pretty good value and worth buying if you don’t qualify for the full amount just before retirement and can afford it.

I need to look into this. I have a public sector pension and vaguely remember contracting out being an issue, but if I look at my pension forecast in my government gateway account it says I'm on course for a full state pension.

Re SERPS, as I understood it, if you were contracted our at any point before 2016, your state pension will be reduced.

This is true. For this reason, I can't get any more than £163. I am unsure if I can boost this to the full amount by buying extra years to make up for the contracted out period.

Barbara, you should believe your personal state pension.

It could be that you have lots of years left to work before state retirement. Like me, despite contracting out for quite a few years, you’ve got enough years already with the extras you will earn before 67/8 to get to 35 years.

Remember the earning thresholds are small so part timers nearly always get a full year. Years in 6th Form at school count, as do years looking after kids and claiming CB until age 12 all count. It all builds up, and projections are looking at years still possible to work.

If you go onto the government gateway for state pensions you can see your exact record and where you have earned years or where there are gaps. I

I started work and my public sector pension in 1992, don't have DC, and have always worked full time, but obviously have a lot of contributions before 2016, but potentially another 20 years to go.

Barbara, yes you should get to 35 years of contributions easily.

That would currently be a pension of £175 per week or £700 per 4 weeks...not bad as an extra to your teacher pension really. Wry worth having. Lots of people live off that alone...clearly nearly £1500 for a couple.

I don’t understand the teacher pension link to reduced state pension.

So l phoned them both up.

My state pension will be full, and my teaching pension will be as quoted.

Absolutely. In spite of any SERPS opt-out it is possible to get in enough years to balance that out. I checked my state pension forecast and I am in track to receive the full state pension amount.

But buy back rules have changed - you can only go back so many years now. So if you are 40 you can’t go back and buy years in your early 20s.

That’s true about only being able to buy back certain amounts of more recent years.

It’s why everyone in their 40s onwards really should get a personal state pension forecast and have a look to see where they are. 20 years to retirement is time to make a plan if needed.

Buying back missing pension often doesn’t make sense until just before retirement anyway if you will be close to achieving the full amount. Often people don’t know how much they will work and actually find they get the full amount of years....very annoying to buy back years sooner and then find you rally didn’t need to. But that must be balanced against the fact that if you’ve had many many years out of work, and especially those that don’t qualify for NI if you never had children etc, that you might need to be buying some sooner than the last couple of years before retirement.

Pensions are very much a thing where a bit of looking ahead and gathering info early, makes such a difference. Relatively small adjustments made early can result in a far better retirement. But so many people have no knowledge and seemingly no interest in gaining it, even if in late 40s and 50s. People just off confused and overwhelmed but literally a couple of hours of trawling round on the internet can start to give you a much better picture of it all. Dedicating the equivalent of a day to it can result in very decent knowledge and a plan coming together. It’s the time many of us spend faffing online every week looking at trash (I put my hands up to this) but with such a valuable outcome.

Absolutely @WombatChocolate.

I mention finance - pensions, shares, dividends, mortgages, credit cards, interest rates as a regular thing to my sixth form tutor group and to my teaching groups.