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Pensions. NQTS/Teachers 'golden pot'

Discussion in 'Pay and conditions' started by Sanz1981, May 19, 2018.

  1. Sanz1981

    Sanz1981 Occasional commenter

    What's all this hype about teachers having great pensions...

    They seem no different than other employers...you pay in and they pay in...

    Take the NQT starting point: before tax £1,700 ish after pension it's £1400 ish..

    Can somebody clarify this whole golden pension pot. Can't see it. Wouldn't recommend my NQTs to opt in.
  2. border_walker

    border_walker Lead commenter

    There is no pot - most produce a pot of money which is invested to provide your pension - so you don't know how much you will get - or it can simply disappear resulting in no pension.
    With the government scheme your pension is based upon your salary, average or final (best of last 10 years).
    Not as good as it was, but still a good scheme.
  3. Skeoch

    Skeoch Lead commenter

    And if, like anyone in the least financially wise, you opt in, your employer also pays in.
    The TPS is one of the few remaining schemes where pension is determined by the salary being earned at retirement (there are complexities, but this is the principle) and not by the performance or otherwise of investments.
    In comparison with most deals in industry and commerce it's an excellent deal.
    Flanks, strawbs and border_walker like this.
  4. border_walker

    border_walker Lead commenter

    But you clearly don't understand how the scheme works - worrying that you are then making this recommendation. Will they thank you for this when it comes to retiring on just the state pension. Can you live on £150 per week.
  5. frustum

    frustum Star commenter

    As others have said, what makes the teachers scheme better than others is that you know what you will get at retirement, rather than it depending on how well the pension scheme's investments have done.

    You might have seen stuff on the news earlier in the year about university staff striking - that was because they were going to change the USS from "defined benefits" (like the TPS) to "defined contributions". Fourteen days of strike action in a month has halted that, and although discussions are still to happen, it sounds as if defined benefits will remain. I do wonder, if USS had changed, whether TPS would then have had a similar threat - although it is a bit different because the TPS is underwritten by the government rather than by the employers.

    Everyone would be well advised to make sure they are saving into some form of pension, and not relying on just the state pension. With a scheme where the employer pays in as well, it's a bit of no-brainer to use that. Although when you are an NQT, your salary is lower so you might not want to be saving any of it, the percentage you have to pay in is less, so actually you get the best return for those years.
    Piranha and border_walker like this.
  6. Piranha

    Piranha Star commenter

    Most employers have now moved to defined contributions. The move started in a big way following Gordon Brown's raid on pension funds. I doubt if many people starting jobs outside the public sector are getting defined benefits. Employers have to contribute to pensions, and all employees would be well advised to take advantage of this. I am very grateful to be living comfortably off pensions built up in the good old days.
    Flanks likes this.
  7. Sanz1981

    Sanz1981 Occasional commenter

    Most of us will I'll prob probably be in nhs beds - if that still exists, rather than living luxury at 68
  8. Piranha

    Piranha Star commenter

    That is OK, but not if you are thinking of recommending them not to join! Only those who have the expertise should give financial advice.
  9. Rott Weiler

    Rott Weiler Star commenter Forum guide

    As you seem to know so little about either pensions or teacher life expectancy I hope you do not offer pensions advice to NQTs, and if you do that they have the good sense to ignore it.

    I don't understand that or what point you are trying to make
    Flanks, border_walker and Piranha like this.
  10. ShoutyGuy

    ShoutyGuy New commenter

    When you go into a supermarket and see one of the BOGOF offers (buy one, get one free) people tend to think it's a good offer.

    With the teachers' pension scheme - it's more like Buy One, Get Two Free.

    You contribute between 7.4% and 11% depending on your salary. Your employer contributes 16.4% (which is the latest figure I could find).

    Are you going to turn down an extra 16% pay? Because that is what pension is - it is deferred pay.

    I once had the great pleasure to walk into a staffroom and to find the Head of Maths shouting at an NQT - he was angrily explaining, in purely mathematical terms why the pension scheme was such a good offer and why she was so foolish to have said that she was going to opt out 'because she wanted to save some money to go on holiday'.

    The pension scheme is far, far better than you would get in many private employers?

    Why would you opt out? When are you planning on retiring?

    There is no pension 'pot' - the government runs it as an unfunded scheme - just like National Insurance.

    If you wanted an example of a funded scheme you would need to look at the Local Government Pension Scheme / Fund.
    Flanks, strawbs, Piranha and 2 others like this.

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