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NQT starting in Sep. Should I opt out of pension scheme?

Discussion in 'Pay and conditions' started by writemejen, Aug 6, 2008.

  1. Thanks ted crilly, I was only at the school from January to July (contract runs out on 31st August) and didn't opt out until about April when I realised that I was automatically paying into a pension. In FE, you had to opt INTO it to get it, you see. As I said, I still stick by my decision. Because I wasn't there for long and the job wasn't permanent and I didn't have a permanent job, I didn't see the point of paying into one because I needed my earnings to pay for my travel fares which were expensive. I.e. At the time, I felt that I couldn't afford to pay into it, especially as I was paid as an unqualifed teacher. I opted out of the GTC membership money too, as I refuse to pay the suscription fee for a body which I haven't joined and doesn't recognise my teaching qualifications. Still, I did appreciate the fact that I was being treated like other permanent members of teaching staff at the school.
  2. Plus, I believe that the increased cost of making up for the last 6 months is offset by my increased earnings as a full-time teacher, especially when i get QTs and go onto the main scale (hurrah when that happens!).

    Anyway, I digress. I repeat to the OP that I think that you're better off sticking with the teacher's pension because it's all set up and done for you, whereas if you got a private pension, you'd have to put up with smarmy salesmen and would probably end up paying even more into it! I also suggest to your sister that if would prefer to avoid spending her twilight years in poverty and material deprivation that she get a pension for herself too.
  3. In case anyone reading this did get talked into going for a private pension in the past. This is what ATL has to say;

    'Under the directions of the Industry?s regulators, personal pension providers who sold personal pensions to teachers (and anybody else who was entitled to join an occupational pension scheme) are required to review whether the pension should have been sold. In the vast majority of cases, where employees were
    advised to opt out of their occupational
    pension scheme (or not advised to join), the personal pension providers have to pay to have them reinstated in those schemes. The regulatory bodies have issued guidance to their members stating that, for employees continuing in service, advice to ?remain in scheme membership? should be assumed to be correct, and that any alternatives should be carefully justified in detail.'
  4. LauraHester

    LauraHester New commenter

    OP - I'm an NQT too and I have opted out until next April as I really needed the money to pay off my student overdraft which was priority as I wanted to get it done before the bank started charging interest.
    As others have said, you do pay more tax and NI, but overall I will 'save' about £65 per month (more the first couple of months until I have reached the tax allowance) which I have set up as a standing order to go into my overdraft.
    I do fully intend to opt back in in April and the school have already given me the form to fill in and the date that it needs to be in by.
    I don't feel I will lose out too much in the long run as by April I will still only be 23 and will only have missed out on 10 months contributions.
  5. gmf


    Re: Post 23

    Sadly you will come to regret this decision in time - staying in the Teachers' Pension scheme really is a 'no brainer'...
  6. LauraHester

    LauraHester New commenter

    post 24

    I did speak to a financial advisor about this decision and they had no real worries about it as long as I did opt in next year.

    In all honesty this was the only decision I could make as without the additional £65 going into my account a month there was no way that I could get my student overdraft paid off.
  7. Wow guys many thanks for the huge response there. I didn't expect it but all the advice is very much appreciated. Reading some of these posts it certainly does look like a no brainer. I'm thinking my sis doesn't realise how good the pension scheme is, and after doing some homework myself I think I'll show her the figures. I hadn't even thought about the contribution being made -before- tax! That in itself is enough for me. Many thanks again, and hopefully this thread is useful for other NQTs potentially wondering about the same thing?

    LH: I really sympathise with your situation. It took me months and months to work my way out of my overdraft when I finished my first degree. I hate the things! You'll get there. Good luck.

  8. When you show your sister the figures remember the NI which makes an even bigger difference than the tax.

    Paying into TP means that you pay the contacted out NI rate of 9.4% rather than 11%. The difference of 1.6% is a quarter of the 6.4% paid to TP.

    So if you pay £100 a month to TP, your NI goes down by £25 and tax goes down by £20. So take home pay goes down by £55 a month.

    Thats £1.80 a day, nearly enough to buy a cup of coffee.
  9. Does anyone know what percentage of your pay goes into the pension? Is it a fixed amount? Am a NQT and just got my first job, am opting in to the pension but would like to know how much is put into each each month/yr.
  10. tafkam

    tafkam Occasional commenter

    6.4% of your salary
  11. So after 2 years after teaching, what would i need to do to "opt" back into the scheme. ?
  12. jubilee

    jubilee Star commenter

    When membership of the TPS was NOT automatic for supply teachers, I opted into the TPS by completing Form 261. I seem to remember that it came with the supply registration pack I got from the LEA. Contact your LEA Salaries department or the Teachers pension Scheme on
    0845 6066166 ( 8.30am -6pm Mon to Friday)
  13. jubilee

    jubilee Star commenter

    As of the past few years, all teachers( whether on permanent or temporary contracts or whether
    p/t, f/t or supply teachers) who work for an LEA are automatically OPted Into the TPS if they don't fill in a form to Opt Out.

    One Opted Out, they have to fill in a form to Opt In whenever they wish prior to or whilst doing LEA work.
  14. jubilee

    jubilee Star commenter

    No. It's impossible to contribute to the TPS from private agency earnings.
    TPS contributions are only made from qualified teacher pay via an LEA.
    In the Northwest the LEA supply teaching is managed by reed employment under their partnership wing called LANCASHITE TEACHING aGENCY. Pay is direct from the Local Authority and thus membership of the TPS is available.
    generally though, private agencies either offer no pension provision or a Stakeholder pension. That is a Money purshase scheme and is subject to the vagaries of the financial markets, unlike the TPS which is a Final Salary Scheme and Index Linked.
    With a Stakeholder, the employer does not make any contributions to your pension. With the TPS, the LA pay in more then you do each month.
    All pension contributions are eligible for tax relief. With TPS deductions, the contributions are made at source and tax is only levied on the earnings remaining. When in the TPS YOU ALSO PAY CONTRACTED OUT national insurance. Thus you pay less tax and National Insurance than a colleague on the same gross pay who has opted out of the TPS.
  15. In the 80s many teachers opted out of the TP and it was the worst thing they could do - I know, I was one of them. I was seriously 'mis-sold' a private pension and luckily when the scandal hit the fan the ombudsman found in my favour and to buy me back into the TP the insurance company had to pay £132,000 to get me to where I would have been had I not opted out.
    It is always tempting to see the short term view, and the extra few pounds ( that's all it would be with the higher National Insurance charge and no employer's contribution) would not compensate for the future when you need your pension.

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