I threw away a final salary pension and feel sick.

[CommanderTaggart]

I was a teacher for 5 years at the start of my career and I had a final salary pension. I then moved to a local government role. I left my teachers pension in its pot, as all I really knew about pensions at the time was that a final salary teachers pension is an amazing thing that I was lucky to have and should hang onto. So I did.
Anyway I am now older, earning a lot more and researching and learning about pensions. I realise to my dismay that if I had transferred my teacher’s pension into my LGPS pot within 12 months of leaving teaching I could have retained the final salary link for those 5 years. Safe to say my final salary is going to be very considerably more than the 30k ish I was on when I left teaching.
I am absolutely kicking myself. I had no idea. It was a huge financial blunder that will cost me dearly in retirement and I just feel that I was in no way prepared for or helped to make this decision. “Seek financial advice” is all people ever say, but realistically when you are young and have no investments and very little in the way of spare cash, seeing a financial advisor is not something that you do.
I’m not sure why I’m posting here really, I just had to vent my huge disappointment and frustration and am seeking commiseration I suppose.

This post is actually quite worrying. Someone who may be earning £90k to £100k and making decisions which may affect a large number of people is so financially illiterate.
I worked in LG years ago as a lowly clerical assistant but managed to understand the pension scheme.
If I remember correctly your teachers pension will be a final salary so there will be no difference whatsoever.
Try going into the office instead of wfh and actually speak to someone in your pension office. I’m sure the slightly above minimum wage pensions assistant will be able to give you better advice than randoms on MN.

According to the calculator someone joining at the time the OP did is actually marginally better off on the career average anyway (you get a smaller lump sum but higher annual payments so if you live 20 years post retirement you get a bit more than if you opt for the final salary option).
Plus in case anyone forgets, the OP does still get her TPS pension. It’s not been lost.

I had 29 years full time paying into the scheme since 1996 and have only got £18k pension so I doubt you’d get £10k after only 5 years.

@BG2015 what age are you can I ask?

I’m 57 in February

So, this thread has prompted me to look properly - which I should have done before posting this - and it turns out my final salary pension is based on my final salary when I left the scheme in 2010. So this post of mine is completely wrong! Sorry!

What that means for the OP, I don’t know - perhaps you’re not missing out on anything after all, or at least only whatever you’d have got from 5/80 x your 2015 salary, index-adjusted?

That's a pot of 300k plus which is not insignificant. Can I ask why you didn't take the lump sum?

I’m guessing you’re close to retirement as final salary schemes were phased out many years ago, so I really don’t think those five years from many years ago will make a huge difference.

If you work 40 years, this will equate to 1/2 of 1/8 of what you get get in your pension. It’s a pain but after tax, it’s barely going to be consequential..

No, the 28% contributions is not theirs. The benefit from a DB pension scheme is not related to the contributions at all.

E.g. If 28% per year was invested into a DC scheme, the benefit would end up being far far greater than any DB scheme.

The TPS was increased to 28% due to the sheer number of pensioners still on final salary scheme. The increase did not benefit those in the TPS no longer on final salary scheme at all.

I got a reasonable payout from teachers pensions after contributing for 34 years. Believe me 5 years is nothing.

Just because the pension scheme changes from final salary to career average, does not lose the final salary link you are entitled to in your final salary scheme which is based on continuous service (a break of usually of max 5 years does not lose the link).

Therefore, the five years are based on the final salary until that link was broken. If you have continuous membership even if the schemes change, your final salary link remains. This could of course make a big difference 30 years down the line.

If it makes you feel any better I did the same. As it is I have a tiny teachers pension but a pretty decent LG one. I'd recommend paying for extra years or an AVC but obviously take financial advice first

I did a lot of number crunching re TPS a couple of years ago when we were in a pension dispute.

You have accrued 5/60th of your final salary in TPS, ie 1/12th. For this to equate to £10k, your final salary would need to be £120k.

Your TP will increase with inflation. You'll lose the extra annual increase you get when you're an active member of the scheme but you're getting that on your LGPS anyway.

It may be that your TP is available at 65 whilst your LGP is probably state pension age.

You can check online how much it's worth. You might be pleasantly surprised; I parked a DB pension with a private employer 25 years ago and is work more than I anticipated.

I understand OP - I took over 2 years contribution back from my NHS pension when I left the service in the 1980’s. Rejoined 18 months later and will retire in the next couple of years - the £450 I had back at the time would now be worth at least £1500 per year for life. Kicking myself but no point dwelling and it paid for my wedding dress!

Career average schemes accrue at a much faster rate than final salary schemes. In order to get advice about transferring you would have needed to know how your salary develops for the next 20 years.

The absolute last place I would rely on for pension advice is chatgpt, I'd ignore that for a start

It's irrelevant anyway as you can't travel back in time and change it

If you started teaching in 2000 and retire at 67 in 2045, some of your pension will be final salary.

Not all of it, but anything up to April 2022(?) can be. And my understanding is that you'd actually be able to retire at 60.

You are giving out wrong information. Where a member has continuous service, they do not lose the final salary link.

Jesus, I am only just reading through the thread but please stop giving opinions.

Final salary is final salary!

I am not wrong. In the TPS service accrued up to 2015 gets final salary benefits. This means the final salary at the point of leaving TPS, not the final salary in 2015.

Here’s the Teachers’ Pensions website confirming it: https://www.teacherspensions.co.uk/members/planning-retirement/calculating-benefits.aspx

Here’s the LGPS website confirming the same - benefits accrued up to 2014 are calculated using final salary when the person eventually leaves the scheme, not the 2014 salary: https://www.lgpsmember.org/your-pension/paying-in/how-your-pension-is-worked-out/

The reason people complained when the career average schemes were introduced is because of the loss of future final salary benefits, but the benefits people had already accrued could not be taken away.

In that case, you probably did the right thing by leaving that money in the Teacher's Final Salary scheme 👌you'll probably be able to take it at 60 and (as others say) it will go up by RPI /CPI based on your Teacher's Salary when you left (it's classed as deferred)..

As a member of the original nhs Final Salary scheme, all of my membership is deferred. In actual fact it is worth far more than I anticipated as it has increased by RPI (and then CPI) - thanks Brexit, Covid & Liz Truss etc 😆) - so that it is the equivalent to 2 pay grades above, AND I have taken it early 😀

Thank you @ChessieFL, some people here made me feel stupid, but seems like I did understand correctly, even if my chatgpt figures are a bit dodgy.
Unfortunately I think the ship has sailed in terms of asking to transfer it now, the reason I am looking into this is that I am starting a new job next month (still local government, just a different county) and was researching what happens to my pension. It’s how I realised what I had failed to do with the teacher’s pension.

I’m going to cling to the silver lining that keeping it separate means I can probably take the teachers pension early, thank you @herbetta.

Local gov and you’re thinking £100k as your final salary?

@CommanderTaggart if you are starting again with a new county they may let you investigate the transfer again. When you join the new county just tell the pension administrators that you have the teachers’ pension and they may let you do the transfer now.

Thank you, I will do that!