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Cancelling Teachers Pension...how do i go about it?

Discussion in 'Primary' started by missblack86, Feb 6, 2011.

  1. Hi everyone,
    Im in my third year of teaching and im in the process of buying my first home. I am currently paying £130 per month for teachers pension, and at the minute that £130 would make a huge difference in my bank rather than in my pension each month.
    I was wondering if there is a way to opt out of the pension scheme for a fixed period, say 12 months? Does anyone have any information about whether this is possible and if so, how do i go about it?

    Any help would be greatly appreciated. [​IMG]
     
  2. Hi everyone,
    Im in my third year of teaching and im in the process of buying my first home. I am currently paying £130 per month for teachers pension, and at the minute that £130 would make a huge difference in my bank rather than in my pension each month.
    I was wondering if there is a way to opt out of the pension scheme for a fixed period, say 12 months? Does anyone have any information about whether this is possible and if so, how do i go about it?

    Any help would be greatly appreciated. [​IMG]
     
  3. I would very strongly advise against taking this course of action. Look other ways you can budget and make cutbacks.
    Opting out for 12 months now could have a serious detrimental effect to you future.
    Someone a bit more 'in the know' will come along I'm sure and fill you in on the cost of opting out.
     
  4. SleighBelle

    SleighBelle Occasional commenter

    I'm with PFF. Now, I don't claim to be an expert, but here's how I believe the system works.
    Every year that you work, you earn a certain fraction towards your final pension. If I'm correct in thinking you've only recently started teaching, then each year counts as 1/60. If you work for 30 years and then retire, you will have racked up 30/60.
    The Pension Scheme look at which is highest, either your final salary or the average of the highest-earning three consecutive years in the final ten years of your career, if you have gone part-time or dropped responsibility points as you near retirement. Then they give you the fraction of 60ths as your pension so if your final salary was £40,000, you would get 30/60 of that- £20,000- as your annual pension.
    So, first and foremost, the more years you can pay into your pension, the better. Secondly, every time you pay £130, your employers pay in around twice as much again (this is where my knowledge gets fuzzy...). Therefore, you may save yourself £1560 a year, but you are forgoing about £3120 from your employers in contribution to your pension.
    I'm 27 and have paid my pension since I started teaching in 2004. Yes, I'd rather have that money in my pocket, but, in the long-run, I'm happy to budget a little more strictly NOW, so that I can afford to heat my home when I retire.
     
  5. Hi missblack.

    If you go onto the Teacher's pension website there is a form called 'Opting Out'. You just need to fill it in and send it to
    your employer (needs to be your LEA not head) and they will do everything else for you. You stop paying your pension the following month.

    Hope that helps. x
     
  6. tafkam

    tafkam Occasional commenter

    Also, although you appear to lose £130 a month, you don't in reality. Because pension amounts are tax-free and reduce your NI payments, you'd actually ony get to keep about 55% of that amount.
    It's just not worth it.
     
  7. I was in a similar situation to you during my NQT year and had to opt out.

    A word of warning: getting back into it is hard... It''s much easier to opt out than it is to get back into the scheme.
    I wish I had been able to stay in.
     
  8. The advice I was given when I started teaching was not to opt out. Someone pointed out that there will always be something you could use the money for. Buying a house, getting married, having kids etc etc. They said it is tricky to opt back in as you depend on that 'extra' money. Good luck with the house purchase. RLBxxx
     
  9. Don't do it!It gets easier!
     
  10. jubilada

    jubilada New commenter

    Many years ago I withdrew almost five years of my pension - I was moving, leaving teaching, starting a family and money was very tight. I now realise how foolish I was - no advice was available at that time. It has made a big hole in the final pension I receive.
    DON'T DO IT!

     

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