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opting out of TP

Discussion in 'Pay and conditions' started by KI161, May 5, 2012.

  1. Am I the only one seriously considering opting out of the teachers pension. I am a single mum with 3 kids and rising costs and the cut in take home pay are just too much now. I assume I can pay more later when my kids have left home. Does anyone know if that is right? - Can't find the info on the TP website.
  2. Are there alternatives which will gain you £100 per week?
    I am a single mother of 3 and tutor once or twice a week, £30 a time. My kids are 7 and under, so they go to bed around 7pm and I tutor at 8pm.
    Obviously not a brilliant time to start tutoring as exams are just about upon us, but something to consider in Sept maybe?
  3. £100 a month, not week!
  4. jubilee

    jubilee Star commenter

    1. Don't just accept the letter telling you that tax cerdits have stopped. My sister got the letter and realised that they've sent it out based on new lower earnings levels that do indeed stop Tax credits if you only have one child, but she has two and so has made them re-assess her.
    2. It's not just extra tax that is levied on pay when no pension deductions are paid but also increased NI on all NI applicable pay (not just on the amount formerly paid into the pension.) NI is levied at a lower, contracted out rate when in the pension (you are contracted out of the State second pension so don't have to fund that with 1.6% extra in NI).
    3.If you end up still eligible for some tax credits, like my sister, you may jeopardise the amount paid if you end up increasing your take-home pay (even modestly) from Opting Out of the TPS. Get as re-assessment done first on Tax Credits based on current household income.
    4. You can re-join the TPS at a later date under current regulations. This government, however, could easily withdraw TPS type occupational pensions for new members or those who want to re-join in the future.
    If you are currently in the Old TPS, which arguably has better retirement benefits, you need to Opt Back In within 5 years to be able to continue contributing under the old regime. Outside the 5 year parameters, you contributr to the new TPS schedule, which has pension payouts calculated on the basis of retiring at age 65 yrs instead of age 60, with actuarial reductions of about 20% of the payouts if you decide to retire at 60yrs anyway and need the pension at that point.

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