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Planning for retirement
14

LostArcher · 03/04/2021 19:07

I know that I cannot keep on going until I am 67. I am 56 now and frankly feel that I am getting near the end of my teaching career. Since the McCloud judgement, I think I can now retire at 60. I work full time atm. I would consider very part time for a while from 59 but I just don't think I can cope with any more work - the last two years have been killers. I know there are companies that give 'free' teachers pension advice Wesleyan being one. I feel I need someone to talk me through options. I went into teaching late at aged 30 and also worked part time for quite a while. Has anyone used an external company for advice and would you recommend?

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Halifaxgirl · 03/04/2021 19:19

I am in a similar position to you. I’ve used the calculators on the teachers pension website but it is confusing especially with final salary and average salary to calculate. I am not even sure how much I will be in the average salary scheme or even if I will be covered by the Mc Cloud agreement as I had some years where I was out of the pension scheme ..

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phlebasconsidered · 03/04/2021 20:06

I need to plan too. Years out and years part time and very unlikely and unwilling to go back to UPS again. I'm 50 in a bit. I just need to plan so I can stop at 60! And pay extra.

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BackforGood · 03/04/2021 20:16

Sorry, I don't know the answer, but I would like to.

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echt · 03/04/2021 22:05

There's this thread on the Retirement forum, which has links to very good videos:

www.mumsnet.com/Talk/retirement/4139909-teachers-looking-to-retire

Also this about AVCs from Teachers' Pension UK:

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

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Lucycat · 03/04/2021 22:12

We (my husband and I are both teachers) used Wesleyan during lock down to plan our retirement- we are both 50 but wanted to think ahead and I have to say they were great. We had several phone conversations, how risk averse we were and how we could take out an additional pension. It's definitely worth talking to them.

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BackforGood · 03/04/2021 23:29

Thank you both

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LostArcher · 04/04/2021 10:05

Thank you @Lucycat. I will give them a ring.

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toomuchicecream · 04/04/2021 18:23

Teachers’ pensions were very helpful when I phoned them. If you go into your account online you can download a statement showing how much you’ll get.

There were a couple of slightly confusing things I had to get my head round. Firstly, most of my pension was in the final salary scheme and the last few years in career average, so the statement was in two parts and I had to add the amounts together. Secondly, you have to decide how big a lump sum you want to take - the more you take, the smaller your monthly pension.

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crimsonlake · 04/04/2021 18:34

When the time comes you can take the automatic lump sum or also take an additional lump sum which then reduces your annual pension. From talking to those that did this they usually took both lump sums if they wanted to pay their mortage off.
Beware the amount quoted on your annual statement as it is only an estimate and I do not think they make this clear enough. You could end up with a larger or smaller amount than expected once the process starts and they begin checking through all your employment records.

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echt · 04/04/2021 21:58

Make share you've kept as a minimum, all your P60s. Lots of LAs outsource their payroll and I can assure you they are terrible record keepers.
LAs who have their own payroll are excellent.

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MrsZola · 13/04/2021 19:34

I second talking to Wesleyan. I had my chat last week and it was so helpful. She calculated what I'd get and then told me to phone TPS, tell them of my intention to claim my pension in October and ask for the figures. She said if they differ from hers, to get back in contact and she'd sort it. My bugbear has always been that the TPS won't give exact figures on their website (there's a very definite disclaimer at the bottom of the benefit statement page about the figures being only estimates) but also say that the onus is on you to check the figures as mistakes can't be rectified once you accept your pension! How am I supposed to reliably do that? I'd rather leave it to a professional.
I had absolutely no hard sell and the advice was excellent.

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RaraRachael · 17/04/2021 13:16

I've talked to Wesleyan and found them excellent. The man I spoke to explained all the routes available to me really clearly so now I know what I'm going to do. As a PP said, he wasn't pushing me to invest in anything and took time to explain everything to me.

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LostArcher · 17/04/2021 16:40

Thank you. Of course, I haven't got round to calling Them but most deffo will do. The thought of Monday is just causing gloom. I also don't want to be wishing my life away until 60 hits. I've broken it down into terms. At best, ten terms to go. After that either retire or go very part time.

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WombatChocolate · 17/04/2021 17:57

Wesleyan are useful.

Essentially, if you were in the pension in 2012, and haven’t had a gap of more than 5 years since then, the service which moved to the new career average system from April 2015, can either remain there or you will be able to choose to have all service in the older final salary system until April 2022. After this, all service will become the career average S system.

What is the difference between the 2 schemes.
The Final Salary (for those in before 2007) accrues at a rate of 1/80 of final salary (this is counted as last year you work or average if best 3 in 10 last years adjusted for inflation) plus you get an automatic lump sum of 3x yearly pension. The key thing, is it’s all payable at 60.

For those joining Final Salary since 2007 and before 2012, the accrual rate is better at 1/60 but there is o automatic lump sum and pension age is 65.

For those joining teaching after 2012 and for everyone’s pension in the career average scheme the pension accrues at 1/57 of each years earning. So all years accrue based in the earning of that year and all are not based on the final salary. There is no automatic lump sum and crucially the age you get full layout is state retirement age...for most 66/67/68.

All of these pensions can be taken earlier (55 earliest) but it is actuarially reduced every year, becaue you receive pension payments for longer.

For many in their later 40s and 50s, the McCloud judgement which will give 2015-2022 the option to be final salary will benefit them. More automatic lump will be achievable and although the actual pension from 2015-2022 will have been accruing at 1/80 instead of the better 1/57, the vital thing for most is being able to retire often at [email protected] big difference for people, like OP who cannot imagine still teaching at 67.

Many will find they can afford to stop at 60 now. And don’t forget, the state pension will kick in at 66/67 and that can be £9k if you have 35 years of NI. Even with many teachers having been contracted out from SERPS until 2016, the more years a teacher works after 2016, the more likely they are to qualify for full state pension by the time they reach state retirement age, even if they finish work around 60, if they have worked the other years. You can create a government gateway account and find your exact figures and contributions immediately by logging in.

For many teachers who want to stop work before state retirement age, the question is how to bridge the gap to 67. They might get a decent sum form the teacher pension at 60, but often need a bit more. People in their 40s and 50s can consider ways to generate money to boost their income for those years from stopping work to claiming the final part of teacher pension and state pension at 67 ish. This could be a private pension (SIPP) or putting money into a sticks and shares ISA or buying AVCs in the teacher pension. What these can do is provide a chunk of money which can gradually be ‘drawn down’ to boost income after stopping work.

Lots of people also use the lump sum from the teacher pension that is paid out at 60 for the same purpose if they have already paid off their mortgage and don’t have it earmarked for other things like helping a child on the property ladder/ moving house/ DIY / camper an or the other myriad of possibilities.

Finally, if it helps, people often wonder about how. Ugh they need to live on. Standard figures used are often £1.5k net per month for an individual and between £2k and £2.5k net per couple. Lots live on significantly less but these give a decent retirement. Teacher pensions are index linked so will rise will inflation as time passes.

Especially given that a full state pension gives £750 per month per individual at 67 and teacher pensions are pretty good, many teachers who have worked a steady career and achieved perhaps 25 years by the time they retire, can find those figures quite possible to achieve by the time they reach state retirement age. Those who work 35+ years can find themselves very well off, especially if they held substantial responsibilities which boosted their pay and had lots of service in the final salary scheme.

The big question for many who will have bigger and bigger proportions if their pension in career average, which will only pay out at state retirement age, is funding that gap. People need to start considering how to perhaps generate a pot which can be used to draw down somewhere in the region of £1k per month between stopping work and getting all their pensions. That’s where the challenge and planning ahead from 40s and 50s lies...because if you’ve been paying in to TPS, that will be sorted, but for most under perhaps early 50s or younger, to give enough at 60 on its own.

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