Pension - how long?

[SallyLovesCheese]

This is probably a really stupid question, but I'm looking at my pensions at the moment to figure out if I'm saving enough (I'm only 40s but want to make sure I'll be "okay" in retirement).

How many years do you get a pension for? I also have a teacher pension. I can't find the answer anywhere, and I know this is probably something I should know, but can anyone help?

Based on my planning to retire at 68.

TIA!

Until you die.

Do you mean that you are in the Teachers’ Pension Scheme? How long have you been in for? This is one of the best pension schemes there is so most teachers hope to be very comfortable on this plus state pension.

I don’t have any other pension provision but have been in the TPS since I was 21 (now mid 40s) and hope to be pretty comfortable.

Log in to your account on the TPS website or give them a ring - they are really helpful.

And yes, it pays out until you die!

You’ll get a state pension until you die.

If you’re in the teacher pension scheme, which is ‘defined benefit’ based on career average earnings, you should also get that until you die.

Most other private pensions are ‘defined contribution’. With these you either purchase an annuity with your pot, then your pension is paid monthly until you die. Or you ‘draw down’ your pot, and then you get it for as long as your savings last. So if you spend it all in 10 years and live for 20 years you would only have state pension for the last 10 years of your life.

Thank you! Very interesting, I wondered if it was until you die but couldn't find anything that said that!

@Chickoletta yes, TPS. Been in since 2009. I'm looking at leaving teaching, though, so I'm guessing the annual amount I currently have on my statement is what I'll get when I claim my pension at 68; it won't increase or reduce once I leave. Perhaps I need to give them a call. Thanks!

If you take out a private pension you will be on defined contribution scheme. That means you’ll pay into a pension pot which will be invested on the stock market and the pot will grow in value until you stop work. At that point, you can use the pot to buy an annuity if you choose….that means you buy a lifelong mortgage they income. Just be aware that you have probably been boosting your teacher pension by around £1k every 18-24 months (assuming a standard teacher salary of upper £30ks) but to buy an annuity of £1k, you will need over £25k in the pension pot…makes you realise how good your teacher pension was and how much you need to save to generate a similar guaranteed income.
The other alternative that most people use these days is to ‘draw down’ their private ones in pit when retiring. It remains invested and they take oerhaos 4% per year out for living. This is cheaper than buying an annuity. This is becaue it doesn’t guarantee an income for life. There is a risk it could run out, plus the value of your pit could drop with the stock market.

Your teacher pension has the benefits of being a defined benefit pension…you know what you’ll get. You will get it for life and the payments are index linked for inflation which is really important.

So absolutely keep whatever you have in that pension already. Chances are you will start a private pension in your next job unless it’s public sector. It will be nowhere near as good as the teacher pension. People estimate that public sector pensions are with 1/3 of your salary. Check if your pay increase in your new job is equivalent to that. Realise lots of people need to leave teaching as they can’t sustain it any longer with the terrible workload, so pension is only one consideration, but do make sure you understand how good that pension is and what you might be taking in and the implications for your old age.

Yes, if you leave the TPS what you have paid in is safe and will grow in line with inflation.

You are probably like me and have both a final salary and career average pension as the scheme changed in 2013 or thereabouts.

On your benefit statement you will see an annual figure. Divide this into 12 and it is what you will get every month date pensionable age until you die. Plus the lump sum.

On leaving, you forfeit other benefits though such as the death in service benefit. This is a real bummer - mine is worth something like £100k.

Plus your state pension which should be £500 ish pcm.

As others have said, it’s one of the few remaining DB schemes and is a v good one.

@Chickoletta good news coming for you… state pension with full qualifying years is now £179.60 per week. Times 52 and divide by 12 and that’s almost £780 a month - loads more than £500!

@Cocomarine - oooh, that is good news indeed!