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Discussion in 'Pay and conditions' started by m2daz, Nov 26, 2011.

  1. Hi all!
    With all this palaver with the pensions etc etc... I was actually considering taking myself out of the teachers? pension scheme. Would that be a good thing to do?... The thing is I have just started my career into teaching, as in im in my NQT year and I have a LOOONG way to go before I receive my pension. And with the retirement age increasing, would I even be alive to receive my pension??!! (sounds a bit dull)

    Also, if i take myself out of the pension scheme, how much would I better off by or worse off by?...

    And what about my money that has started to accumulate in the pensions, am I entitled to that?..( im assuming I am as it is my money)

    Soo many questions, but i am sure some, or many of you have been thinking the same?.

    I have been advised not to take myself out of the scheme with no actual reason, the best reason i have hadis ?just stay in it, you are better off?...but how is this???...would someone like to elaborate?

    Hope to hear from you guys!
  2. Georgia99

    Georgia99 New commenter

    The teaching pension is incredibly good at the moment. I am a NQT,and went on the teacher pension website to get a calculation of what I would get on retiring. My forecast was actually a very nice lump sum and a good yearly income. With the changes this will obviously be less and constributions will be higher but the return will still be much better than any other pension scheme you could take out.
    You might not live until 68, but if you are planning on having children then they will receive money from your pension should you die before pension age.
    You might feel retirement is a long way off, but if you do live until 88, then you will have 20 years where your only income will be a pension. If you have paid in to a teaching pension you will probably have a good enough income to enjoy your retirement, have holidays and days out etc. If you haven't paid into the pension then you will receive the state pension only which I believe is just over £400 month. You won't have a very good standard of living for retirement on that.
    My mum is meant to be retiring this year and only started paying into her pension a few years ago, she is going to lose over 1k a month as a result and will go from being quite comfortable to quite skint. So she has chose to continue working but knows that in the next few years when she is unable to work any longer, she will not have the retirement she would have liked.
  3. The teachers' pension is currently a very good scheme. Don't forget that it is also index linked so will go up with inflation which many other schemes don't. It also offers death in service benefits and benefits for your dependents too.
    You are going to be required to pay into some kind of pension no matter what so would be better off contributing to the teachers Pension rather than another one.
    Don't forget too that as well as your own contributions going into it the employers are paying substantial sums into it for you too. Do not disniss it without taking VERY good advice.
  4. Stay in the pension scheme, if you plan to remain a teacher for the foreseeable future. It is a good scheme, and will remain so even after the gov's proposed reforms, compared to most (if not all) schemes available anywhere else (or not having one), in my view. But be aware that things can change in the future, so don't take it as a promise! But it's likely to remain a good option.
  5. Generally speaking, any scheme where the employer is contributing as well as the employee has to be better than one where only you are paying in, unless you can afford to make up the difference.
  6. It is possible that you and your future partner and children will all be run down by a bus. If this was to happen in the future then opting out now would be best. Not everyone will make a 'profit from a pension' thats how it works.
    However, with tax free employers contributions of 14.1% at present, most teachers can look forward to a secure retirement without having to switch off the heating in the winter. It might seem like a long way ahead now, but it will happen if that bus runs out of petrol.
    If you do opt out of TPS you will have to pay into the State Second Pension instead. Your employer will make no contribution and the benifits will be very poor.
    I expect the Lib-Cons will be hoping for lots of people to opt out to help pay for the cut in the 50% tax rate.
  7. jubilee

    jubilee Star commenter

    Opt Outand you will pay income tax on the money no longer going into the pension (tax-free at present) and you will pay higher National Insurance on all your pay over about £400 per month because being in the pension menas that you now only pay the lower Contracted-Out National Insurance.
    If no longer in the TPS, you pay the higher Contractd-In NI (contracted in to the State second pension which will generate an add-on to your eventual state pension.
    Currently the State retirement pension age is higher than the TPS retirement age and if opted-out you'd have to work until the older age or live off your savings until your State pension (= ADD-ON PAYMENT) kicked in.
    In the TPS, you can either work until the standard retirement age OR you can trigger the TPS pension at any age after 55 years (with reductions applied for accessing it early) and only then have to wait for the State retirement pension.
    Mr jubilee was in a similar final salary scheme to the TPS and he took early retirement this year at age 56. Had he not been in the pension, he could not have chosen to give up the job he was beginning to hate as we'd have had to live off savings and probably take other jobs to finance the 9 or 10 years until he gets the State pension. As it is he's had a lump sum that we have invested and a decent enough annual pension from his 30 years in the scheme.
    Had he died In Service, I'd have received a very substantial lump sum and an annual pension from his contributions.
  8. Hi all, i am in the same boat as m2daz!..an NQT all frazzled and confused! to be honest I have made my decision that I want to opt out of the pensions, yes I you lot have given me VERY SOUND advice and information that I WAS NOT aware of, but even still, I think opting out would be the best thing. I can not take the hassle of al this, yes we can strike, and we can strike again, BUT how much of wages are we going to sacrifice for our pensions (for which I may not even be alive for, unless the bus runs out of petol!!) haha i luvvd that! =)
    how I see it is my earnings is my money and I would like to be in charge or it. I do not want some bloke sitting in parliament or where ever making me run/chase after what belongs to me.
    just a quick question, if i am to opt out then,
    who do i contact?
    and am i entitled to what I have saved in my pensions after opting out?
  9. Crowbob

    Crowbob Senior commenter

    You must promise to come back in 30 years and tell us if you feel the same.
    Your thinking is faulty.
    Cutting nose off to spite face.
    Enjoy living on the state pension.
    If you have less than 2 years service in the scheme, you can claim back contributions (minus tax and NI).
  10. Crowbob

    Crowbob Senior commenter

    You have to admit that if many new teachers choose to opt out the difference between what is paid IN each year and what is paid OUT each year will increase. This will make the fund unaffordable, if not unviable. At this point the Government would be looking to make yet more changes.
  11. For most of its existence, the teachers pension fund has made a considerable surplus, all of it pocketed by Government. About 10 years ago this surplus started to decrease with the risk of a deficit in the future. So in 2007 long term changes were introduced, agreed by all sides, to increase the retirement age for new teachers to 65 to ensure that the fund would be viable for the foreseeable future.
    The changes now being forced through by the Lib-Cons are based on claims that the fund is no longer viable, only 4 years after major changes were introduced. If the Government is so convinced that the Teachers' Pension Scheme will run out of money tomorrow, why are they refusing to publish the independent pension fund's actuarial report?
    I think that David Cameron's friend Jeremy Clarkson was rather more honest in his opinion of public sector workers and the true motives of this right wing coalition.
  12. Middlemarch

    Middlemarch Star commenter

    They're not grown adults who could easily do a bit of Googling before they ask questions.
    *TES Bingo for a 'hope you don't treat the children you teach like that*

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