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The Teachers’ Pension Scheme, traditionally regarded as a ‘perk’ of the profession, is under review. Do teachers have anything to fear?
Times Educational Supplement, 30th July 2010
Along with decent holidays, a generous pension scheme has always been considered one of the perks of teaching. “As things stand it’s as good as anything out there,” says Stuart Gayer, of BBT Group, a specialist financial adviser.
But for how much longer? A review of public sector pension funds - of which the Teachers’ Pension Scheme (TPS) is the second largest - is already under way, with changes possible as early as next spring.
The Government says it needs to cut costs. But while the number of retired teachers has risen in recent years, meaning a higher pension bill, teachers’ unions feel that this review has more to do with political posturing than hard economics.
“Pensions were reviewed only a few years ago,” says NUT pensions expert Andrew Morris, pointing to changes in 2007 that saw teachers’ contributions rise and the standard retirement age raised from 60 to 65 for newcomers to the profession. “Those changes made the scheme affordable and sustainable.”
So should teachers be worried by the latest review? “It’s a case of wait and see,” says Mr Gayer. “I had a headteacher contact me wondering if he should retire at the end of this year, to safeguard his pension. But that’s an over-reaction. It’s unlikely that benefits built up over many years will be suddenly taken away. The probability is that contributions will rise slightly, and that next spring teachers will look at their pay cheque, notice it’s a little less than usual, shrug and forget about it.”
The good news is that a change of that nature would be phased in over many years. Mr Gayer’s advice is not to panic - and make the most of the current scheme. “If you’re worried about the future, you could always consider topping up your contributions,” he says. “But for as long as the TPS remains a final-salary scheme, teachers should stick with it. The Government may ask you to contribute a little more, or make you wait a little longer - but you’ll still be getting a good deal.”
Retirement planning crucial for teachers over 50
Education Today, February 2010
Government plans to cap state contributions to teachers’ pensions have made retirement planning more important than ever before.
For the proposals announced in December in the pre-Budget report raise the prospect that the benefits former teachers receive from their pensions will be reduced in the longer term.
While the scale of the cut in employer contributions is yet to be announced, teachers’ pensions are thought the most likely to be the first in the public sector to be revalued.
The profession is therefore likely to feel the impact of the new arrangements before other public sector employees.
The impact of the proposed changes means that a thorough examination of future finances has become even more important if teachers are to make the most of their retirement.
This is especially true for those over 50, who make up a large proportion of the general teacher population.
Advice on planning for life after the classroom is available from a number of sources but some experts are concerned that many teachers do not take the subject as seriously as it merits.
One of them is Gary Robertshaw, Course Manager at the Teachers’ Retirement Agency, which provides courses on retirement planning designed and delivered specifically for teachers looking ahead to life after work.
Gary says: “It’s important that teachers recognise the need to take responsibility for their retirement planning.”
“We have been running seminars to help teachers plan for retirement for over 15 years and we know that many teachers just aren’t as well prepared as they could be for what lies ahead.”
“The biggest impact on retirement is on their lifestyle. After working hard throughout their careers, teachers have earned the chance to enjoy retirement comfortably.”
“Some, however, risk a nasty surprise when they leave work because they haven’t given enough thought as to how to make their lump sums and pensions benefits work hard for them.”
The Teachers’ Retirement Agency runs one-day seminars nationally in Spring, Summer and Autumn.
“We would advise teachers over 50 to take the opportunity to learn how they can be better off in retirement. The support we can provide not only helps teachers to make more of their money in retirement but also offers them greater peace of mind as they approach the end of their careers.” Gary says.
Moving from a busy profession to a life of retirement can be a positive change, if managed well.
Times Educational Supplement, December 2009
With up to 54,000 teachers currently considering retirement, many will be busy planning ahead for a smooth departure from the teaching profession. Some will be concerned about money, while others will worry about the emotional and psychological effects of retirement.
To cope with the change from classroom chaos to long, endless days at home, retirees can take effective steps to manage the transition. Gary Robertshaw, Course Manager at the Teachers' Retirement Agency suggests that variety is the key. “Avoid mind numbing routine. Be reckless and spontaneous sometimes! It’ll make you feel refreshed and give you something new to talk about.”
Patrick Nash, chief executive of the Teacher Support Network agrees: “Hobbies can be a great way to enjoy your spare time, meet new people, try new activities and learn new skills.” Try contacting local authorities, read local newspapers and check notice boards at doctors’ surgeries for social events and health activities, he advises. “Alternatively you could always start up your own coffee afternoon or games club if nothing available appeals to you,” says Patrick.
“Retirement can be an exciting time but may present new problems and challenges continues Patrick. Some retirees may feel stressed owing to changes in personal relationships, such as spending more time together with a partner; or maybe a loved one has fallen ill or passed away. For those in that situation, Patrick suggests contacting Relate, a relationship counseling charity, or Cruse Bereavement Care , a national charity for bereaved people.
Here are some useful tips from the Teacher Support Network and the Teachers' Retirement Agency:
Travel around
Travel is free by bus for those over 60, and discounted by rail, so if you’re feeling up to it you could bus your way from North to South England or anywhere else you’d like to travel. With free travel there’s no excuse to stay at home so get out and about, visit friends and relatives, and see more of England.
Keep time for yourself
If you’re in a relationship, you could find yourself spending more time with your partner which can be fulfilling but can also feel a little strange if you’re not used to this, says Gary. Make sure that you keep time for yourself and agree this with your partner so that they understand.
Enjoy it, don’t endure it
“It’s really about choices,” says Alan Farnish, course leader at the Teachers’ Retirement Agency. “There are hundreds of routes to choose from because there is no one way to spend retirement. People need to ask themselves what choice they are making and why they are going down that route.”
It’s impossible to know how long you’ll live for, but we do have average life expectancy rates. Better diets, exercise and medical knowledge mean that we can all expect to live a darn sight longer than previous generations, so retirement can literally be seen as another life-time. Plan carefully and enjoy your golden years.
