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Building up a career average pension after receiving final salary one

Discussion in 'Retirement' started by m_mcdermott1, Nov 12, 2018.

  1. m_mcdermott1

    m_mcdermott1 New commenter

    Having returned to teaching on a 0.4 contract after retiring and starting to receive my (final salary based, protected scheme) pension, does anyone know how much pension under the new career average scheme I can accrue on a 0.4 contract now? Anyone done the same and got any experience of this. For example, if I paid in for two years (on 0.4), how much this would be worth?

    Thank you
     
  2. binaryhex

    binaryhex Lead commenter

    "Having returned to teaching on a 0.4 contract after retiring"

    .... splutters coffee over the table .....

    Why ?????????????
     
  3. Guest

    Guest Guest

    I am doing the same. At the moment 0.26. I believe you accrue at 1/57 of your salary. For me about £150 per year? I am also having my deferred LGPS salary transferred into new pension from dinner duty days! (Tiny but it all helps!)
    Binaryhex, maybe some of us actually enjoy it or do not have the odd 300K laying about! (As you mentioned in an earlier post)
     
    Sundaytrekker likes this.
  4. Sundaytrekker

    Sundaytrekker Star commenter

    I’m doing it, too. I’m accruing Additional Service After Retirement and, on a little less than 0.4 and a UPS salary it is accruing at about £250 a year. If, and it’s a big if, I keep it up till my state pension age at 66 I reckon I will have accrued nearly £2k a year extra with inflation. The extra NI entitlement will boost this to over £4K a year. I think it’s worth having.
     
  5. Sundaytrekker

    Sundaytrekker Star commenter

    So two years worth is likely to be about £500 a year.
     
  6. m_mcdermott1

    m_mcdermott1 New commenter

    Thanks for replies so far.
    Seems, like I thought ... it is worth it, as your employer also makes a contribution. I regard it as a good savings scheme (much better than any interest one could get on money in a bank or building society). I'm basic teacher, top of main scale, but no extra payments for any additional responsibilities anymore (and enjoying the lack of pressure associated with all that). So from what I'm hearing here, if I can get an extra £500 per year from two years contributions I'd be quite happy. Btw - is there also a lump sum on commencement of the claim like you get with the protected scheme?
     
  7. Sundaytrekker

    Sundaytrekker Star commenter

    MPS will be a little lower. If you want part as a lump sum then it reduces the annual amount. As the lump sum will be small and I’ve had my final salary one, I will leave it at the higher annual amount. Your emplyer does pay a large amount but it doesn’t add to the calculated figures. It just keeps the scheme going as planned.
     
  8. emerald52

    emerald52 Star commenter

    I did 4 years at 0.4 after retiring. I got a £2k lump sum and £60 a month on top of my pension.
     
    tall tales likes this.
  9. m_mcdermott1

    m_mcdermott1 New commenter

    Thanks Emerald52, that's really useful. Seems to equate to £500 lump sum for each extra year worked, and £15 extra per month (£180 over the year).

    Can I ask ... Were these figures you quote on 0.4 based on being top of main scale salary, and with no additional responsibilities/payments? Also, when the time comes to finally (finally!) retire, is the process just like when applying for your pension first time round, and do you get the additional monthly sum as a separate (to the pension already being received) pension?
    Many thanks
     
  10. PeterQuint

    PeterQuint Lead commenter

    To be clear on the average salary scheme, you can ignore whether it’s part or full time, it’s entirely down to your earnings.

    Whatever you earn that year, divided by 57, that’s how much your annual pension will increase, though that’ll be adjusted for inflation and/or reduced it you take it early.

    If you earn £30,000 it doesn’t matter if that’s because you’re on a salary of £30,000 full time, or £50,000 reduced to £30,000 because you’re working 0.6 part time.
     
  11. emerald52

    emerald52 Star commenter

    @m_mcdermott1 I was UPS3 with TLR 2b. The money is rolled up into my main pension. I probably should have forgone the lump sum and got more than the £60 extra per month but never mind. It’s the same process but easier second time round! Good luck!
     
  12. paulstevenjones

    paulstevenjones New commenter

    That is news to me! very welcome news. Thank you. I thought it was still multiplied by years of service.
     
  13. m_mcdermott1

    m_mcdermott1 New commenter

    Sorry for being a bit dim on this, but does this mean that total (gross) salary year on year is added up, then multiplied by 57 to arrive at how much (annual) pension is paid? So, for example, if someone earns £30,000 in year 1, £20,000 in year 2 and another £20,000 in year 3 then retires this would be ...£70,000 divided by 57 = £1,228.07 (which divided by 12 = £102.34 per month). If so, how/ where does the lump sum option come in?
     
  14. heldon

    heldon Occasional commenter

    each year is divided by 57 then that amount is increased each year by cpi+1.6% whilst in service but by cpi when not in service- no lump sum. Why are teachers so bad at planning their finances, but so good at all the pointless planning! If you do a bit of basic research all the information is there!
     
  15. heldon

    heldon Occasional commenter

  16. Sundaytrekker

    Sundaytrekker Star commenter

    Each year is worked out individually by actual salary divided by 57 then adjusted each year by an inflation factor plus a bit (1.6% at present, I think). Just keep adding them up as you go. At the end you decide how much lump sum you want, up to a maximum, this reduces the pension per year.
     
  17. m_mcdermott1

    m_mcdermott1 New commenter

    Thanks sundaytrekker. So if someone had built up a total of, say £1,200, and decided to take non of it as a lump sum, the full (£1,200) amount would be the annual pension (= £100 each month)
     
    Sundaytrekker likes this.
  18. PeterQuint

    PeterQuint Lead commenter

    As long as you took it at 67.

    Any earlier and it's reduced.
     
    Sundaytrekker likes this.
  19. Sundaytrekker

    Sundaytrekker Star commenter

    66 in my case but it rises after that in line with the rise in state pension age.
     
    PeterQuint likes this.

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