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The dilemma of becoming an NQT and whether to opt-in to the Teachers' Pension.

Discussion in 'Pay and conditions' started by tom clancy, Jun 6, 2011.

  1. As things stand at the moment TPS is widely regarded as probably one of the best pension schemes around.
    However, in spite of leaks and rumours, no-one is totally sure just what the forthcoming changes will be, other than we will have to "pay more, for longer, to get less." The scheme looks as if it will move from Final Salary to Average Earnings.
    Nevertheless, most employers pension schemes are better than individual ones, simply because of the employers contributions.
    The news, good or bad, will be out this month, so watch this space, as they say.
  2. coppull

    coppull New commenter

    You have come to the right place to receive the correct information.Please do not take information from those ,who are not in the scheme. Clearly have these people ,told you that you are going into a gold plated scheme!
    If you work in Inner London you pay the same % of your salary into the scheme ,to those ,who live in the grim north.[​IMG] It always seemed an expensive amount to pay on your first salary payment. Even forty years ago 6% was a lot to pay on a salary of £1000 a year.
    Yes with the LA payment, a much better scheme ,than you paying yourself to a private one.
    Please do not opt out of the scheme.
  3. AdmiralNelson

    AdmiralNelson New commenter

    In the 1980s teachers were offered the chance to opt out of the scheme - many who did regretted it. You would be well advised to take advantage of this scheme ASAP - it is as much part of the benefits of being a teacher as the salary or holiday entitlement.

  4. If you opt in you pay less tax and national insurance. For every £100 you pay into the pension your take home pay is only reduced by around £55. So the real cost of joining the pension is equivalent to half a larger and a packet of crisps each day. If you opt out you are throwing away the employers contribution of 14.1%, that works out around £4000 tax free.
    Anyone telling you to opt-out is daft.

  5. Helena Handbasket

    Helena Handbasket New commenter

    All I meant by an ISA was if they feel they can't afford the full amount that goes out monthly into a pension then they could put a small amount away in an ISA so they feel like they still have something there.
  6. jubilee

    jubilee Star commenter

    When you start a teaching job you are automatically opted-IN to the TPS. You have to actively Opt-Out.
    If you opt -Out, you will pay more income tax (£20 more for every £100 that doesn't go into the TPS) and your National Insurance on ALL your earnings over avout £400 (that is NI Free each month) is charged at a higher rate (over 11% instead of the just over 9% Contracted-Out Rate when in the TPS.
    I doubt if any private pension would be a better option than the TPS, even if the proposed changes are brought in.
    The lower you are on the payscale, the cheaper it is to 'buy' a year in the scheme. If you Opt-Out you will miss those cheaper early contributory years. Each year in the pension ultimately generates the SAME pension value for you in the future.
    Being in the pension also provides you with financial protection for family (Death in Service benefits and widow's/widower's pension) which may not seem necessary now but will be security in the future if you can't afford to get life insurance or have medical issues that make such insurancetoo expensive.
  7. AdmiralNelson

    AdmiralNelson New commenter

    Your 'advice' in this & the earlier post is unhelful and damaging. Please desist from posting if this is the best that you can do...
  8. Helena Handbasket

    Helena Handbasket New commenter

    On a public forum I am entitled to post. At no point did I say that the OP should opt out nor did I say in any way that an ISA was equal to a pension. The OP in question is clearly confused and I offered a different opinion to some others to show that in my experience I could not afford the pension.
  9. erm


    It is dangerous to suggest that one 'can't afford' a pension. It implies that it is a can-do-without 'luxury'. It is not. If there is genuinely no room for other cut-backs in your budget, then I would get yourself down to the CAB for some independent, expert advice rather than listening to strangers on an internet forum.

    (This is directed not just to Helena, but to anyone who feels that they can't afford to opt into the teacher's pension.)
  10. AdmiralNelson

    AdmiralNelson New commenter

  11. Cheers for all the help. I was thinking that sicking with it would be the best idea and what has been said, some what, cofirms those beliefs.

    Thanks again everyone.

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