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Retirement in the middle of the year.

Discussion in 'Retirement' started by Puppa2014, Mar 20, 2020.

  1. Puppa2014

    Puppa2014 New commenter

    I have a maternity cover contact full time until August and then part time until November. I will be 60 in June and I thought I could have my pension from that day. However the TPA said that I need a break on my birthday in order to get my pension from that day. HR said that I need a different contract from that day. Can anyone please give me an advice? What are my options? Should I stop paying my pension contributions or I will get more benefits if I stay longer in service? Much appreciated for your answer.
  2. diddydave

    diddydave Established commenter

    Taking a break in order to claim sounds right but there are some points to add.

    1. If you take it AT 60 then there are limits on what you can earn. Taking it at 59 and 11 months would remove those limits and, from my calculations, you are better off doing that up until you reach the age of 98!

    2. If you work beyond 60 and are still in the scheme then you add more 'service' to the calculation BUT (and it is a big BUT!)...check that it is worth it. Many teachers are staying in the scheme as they believe doing so gets them MORE...but it may not be the case - particularly if you have had breaks in service or have been on the top of your pay scale for 10 years or more.

    3. If you take your pension now, or before June, by taking a day's break in contract - which will need your employer's agreement - then you can rejoin thereafter and gain additional benefits (it's called "additional service after retirement").

    4. You could look to take phased retirement after August if your salary is going to drop by 20% or more.

    In any event I would suggest you have someone look in detail at your exact service history to put some real numbers in £ and pence on your situation. Wesleyan have been good (and free) for many through the unions but I'm not sure how many will be doing face-to-face meetings at the moment.
    Morninglover and Puppa2014 like this.
  3. diddydave

    diddydave Established commenter

    One other point is that if you work beyond 60 when you do finally take the pension they add up all of the pension you would have got from 60 and pay it in one lump sum BUT not tax-free. Indeed, if this takes you into the higher tax brackets it will be taxed at that higher level!
  4. Puppa2014

    Puppa2014 New commenter

  5. Puppa2014

    Puppa2014 New commenter

    thank you very much
  6. Sundaytrekker

    Sundaytrekker Star commenter

    My view is that , as you are changing contracts at the end of August that would be a sensible point to have a one day break in contract as it is a genuine change. Or the other option is to opt out of the pension from your birthday or from the month before for the reasons diddydave says.
  7. Puppa2014

    Puppa2014 New commenter

  8. diddydave

    diddydave Established commenter

    'Opting out' before you are 60 won't make a difference to the limit put on the amount you can be paid. Only by taking your pension before you are actually 60 does it remove those restrictions.
    Sundaytrekker likes this.
  9. Brianthedog

    Brianthedog Occasional commenter

    OP, in light of the latest news regarding COrona virus my guessing is that the mat leave contract has been withdrawn? If so, I would apply for your pension to start just before you turn 60 so that the limit on what you can earn once in receipt of your pension is not capped.
  10. Puppa2014

    Puppa2014 New commenter


    If my 60th birthday on 11th of June, can I take a break on that day? Will be my last pensionable day the 10th and start again on the 12th? Sorry for asking such question. Just to be sure. Many thanks
  11. Puppa2014

    Puppa2014 New commenter

    I submitted my application 3 times on a line at TPA, but my school keeps rejecting it because the employer has indicated that they are not my last or current employer HR and Payroll know nothing. They accuse TPA. What should I do?
  12. diddydave

    diddydave Established commenter

    If you do then you are taking your pension AT 60.

    If you do that and you carry on working they may stop paying your pension.

    For example suppose your salary is £40,000 now. The salary they will use (it is shown on your benefit statement) is likely to be around £45,000. If your pension is more than £5,000 then you have gone over the LIMIT for pension + pay and they will abate the pension. (Now I'm not sure exactly what that means, it may be that they stop the pension payments altogether or they pay just £5k.)

    If instead you had the break BEFORE the 11th June and took your pension then there is NO LIMIT. You get almost all (99.8%+) of your pension AND your salary.
  13. Puppa2014

    Puppa2014 New commenter

    Thank you so much!!! If I work as a supply, will I get a limit?
  14. diddydave

    diddydave Established commenter

    The limit applies to occupations that can contribute to the TPS, so it depends on the type of supply work. If it is through an agency then most of these do not qualify for the Teacher Pension scheme but if it is directly with the school then yes.


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