BATOD
The British Association of Teachers of the Deaf
Promoting Excellence in Deaf Education

When you are old…

This is a series of articles about pensions which has appeared in the BATOD Magaine in January, March and May 2007.

In January 2007 Ted Moore asked, ‘How prepared are you for retirement?’

For some time now I’ve been intending to jot down some thoughts about retirement to pass on to BATOD Magazine readers. So I’ve managed, at last, to get off the sofa.

Fundamentally, the way that retirement can affect you falls under two main headings: Joy and Poverty.

Joy will of course be interpreted in different ways by different people. But perhaps some of the following things will give cause for celebration. There should be no more:

  • writing reports, lesson plans, policies, letters to parents or letters to the local authority
  • marking of food-stained scripts
  • Sunday (and generally all other) evenings spent completing paperwork and doing the ironing at the same time
  • panics about Ofsted visits
  • Performance Management
  • Threshold application forms to fill in
  • listening to the whinging from children, parents, headteachers and colleagues
  • new policies and re-organisations from the local authority or DfES
  • adhering to strict dress rules – wearing a tie when the temperature is 30°C, for example
  • traffic jams to encounter first thing in the morning
  • rising early unless you want to (perhaps so that you can engage in schadenfreude!).

But, of course, all of the above are things to be rid of. So what joys are to take the daily grind’s place?

Take your pick.

  • world cruises, holiday homes, taking holidays when all the children are in school, holidays in Australia during January and February
  • having time to visit people (and talk to them)
  • moving nearer to your own children (grandchildren) – seeking permission first, of course!
  • staying up late to watch a midnight movie or sport without falling asleep
  • playing sport in the week when the facilities are reasonably quiet and the unfortunates are still slogging away
  • sorting out the garage, the loft, the spare bedroom and/or the garden
  • helping out with a charity or a voluntary organisation
  • above all else, not having to comply with the rules (often petty) of the workplace. You now have the chance to say ‘No’ to that and ‘Yes’ to this.

Unfortunately, these latter activities all involve money. The questions are, therefore, ‘Will you have enough?’ or ‘Are you going to be linked to ‘Poverty’?’

  • Will you have paid off the mortgage?
  • Will you have fully paid-up savings accounts, alternative pension schemes’ accounts and/or insurance policies to supplement your teachers’ pension?
  • Is your partner, wife, or husband rich and still working? If not, does she/he already have a worthwhile pension?
  • Will you be able to afford a luxurious lifestyle or have to wear lots of jumpers so that you can leave the heating off?

In addition, have you investigated:

  • how many FTE years of pensionable employment you have
  • how much the state pension is going to be worth to you, and when you can get it
  • what ‘power of attorney’ involves
  • how inheritance and capital gains tax might affect you in the future
  • alternative forms of employment?

And/or have you:

  • made a will
  • taken out health insurance
  • decided to carry on teaching until you are thrown out
  • considered what life is like working in a supermarket to pay off your debts?

©BATOD Magazine January 07

Can you afford to retire?

In the March 2007 Magazine Ted Moore presented some general thoughts about retirement and he provided some more practical information.

When can I claim a pension? At 60, but you can work (at least for the time being) until 65. You can also go on until 70, if all parties are in agreement! The retirement age will go up to 65 in 2013.
What are the maximum number of years that I can do that are ‘pensionable’? 45 years
When can I apply? You can get a form from your local authority and you will need to apply four months before your planned retirement date. Generally you will need to consider the date in relationship to your birthday and/or the date you commenced teaching
How much will I get? Your salary is calculated on the basis of 1/80th of the average salary for all the years of reckonable service.
What does average salary mean? It means the best 365 days’ salary in the last 1,095 days (three years!) of service.
What does reckonable service mean? This relates to full-time work. So, if you are on a 0.5 part-time contract you will have to work for two years to get one year of reckonable service.
So, come on, how much will I get? Well, a lump sum is calculated on the basis of 3/80ths of the average salary.
Never mind the waffle, give me an example! Example (based on September 2006 salary figures):
UPS 3 = £ 33,444
SEN 2 = £ 3,597
Total = £ 37,041

So you’ve worked for 40 years (well done!)
£37,041 x 40/80ths = £ 18,520.50 (annual pension)
This then equates to £ 18,520.50 ÷ 12 = £ 1,543.33 per month
(or for the numerically challenged: £ 356.16 per week).

And the lump sum? £ 37,041 x 120/80ths (40 x 3/80ths) = £ 55,561.50

But I haven’t worked that long!

Well, based on the same calculations:

Service: 30 years 20 years10 years
Annual pension: £ 13,890.37 £ 9,260.25 £ 4,630.13
Per month: £ 1,157.53£ 771.69 £ 385.84
Per week: £ 267.12 £ 178.08 £ 89.04

So, having worked that one out, are you going to have sufficient money to finance your life of leisure and luxury? If not, shouldn’t you be putting money into other savings accounts now?

One final word of advice, especially for those who have done a lot of part-time work or changed jobs several times: keep a record of your employment and the superannuation and national insurance contributions you have made.

Any questions or comments to make please contact Ted Moore via the BATOD Secretary or contact your teacher union.

Alternatively, you can get information from:

Capita
Teachers’ Pensions
Mowden Hall
Staindrop Road
Darlington
Co Durham
DL3 9EE
Tel: 0845 6066 166
Text Phone: 0845 6099 899
The Teachers' Pensions website

©BATOD Magazine March 07

A comfortable retirement?

The May 2007 Magazine carried Ted Moore's explanation of some of the complexities of the State Pension.

I thought, somewhat foolishly, that this would be an easy topic to summarise for the Magazine. I had the illusion that getting a State Pension (SP), on top of my teacher’s pension, would be straightforward and that I would be able to live a life of luxury, bearing in mind the bus pass, cheap haircuts and reduced subscriptions to many sporting activities. Not so!

Having now researched the area to a degree, the main finding is that the whole matter is complex and really needs to be examined on an individual basis. But having said that, here are some facts and pointers.

  1. State Pension rates usually increase each year in April. Please bear in mind that there will be some changes to the regulations and amounts payable in April 2007 and that what is presented below needs to be checked out after this date.
  2. The SP is based on the records held by The Pension Service (part of the Department for Work and Pensions) of an individual’s National Insurance (NI) contributions during his/her working life.
  3. The SP is paid to people who have reached pension age (60 for women, 65 for men) and fulfil the National Insurance contributions’ conditions.
  4. However, Parliament has decided to equalise pension age at 65 for both men and women. The change will be phased in between 2010 and 2020 but will not affect anyone born before 6 April 1950.
  5. Now we come to the complex bit! The following are some of the questions that will be asked of you when you are making your claim:
    • Are you married?
    • Are you a civil partner?
    • Are you divorced or has your civil partnership been dissolved?
    • Are you widowed or are you a surviving civil partner?
    • Do you intend to work past SP age?
    • Would you want to defer claiming your SP so that you can get extra SP when you do retire?
    • Have you been able to pay full NI contributions for at least ten years?
  6. What does this mean in practice? At the basic level this means that the full (ie you have fulfilled the contribution conditions) weekly rates from 10 April 2007 are:
    • Single person £ 87.30
    • Wife on husband’s contributions £ 52.35
    • Married couple on husband’s contributions £ 139.65

However, your pension depends on the number of qualifying years – those years where full NI contributions were made. So a woman with a working life of 44 years will need 39 qualifying years for a full pension and a man with a working life of 49 years will need 44 qualifying years. There is a sliding scale which displays the percentage of full pension you can receive depending on the number of years of contributions.

A further example is that in my own case, my wife (who is over 60) has not paid the necessary contributions, so only receives 10p a week! However, this is offset by the fact that some time ago she took out a policy in which she made Additional Voluntary Contributions (AVCs).

You don't have to claim your SP as soon as you reach pension age. If you wish, you can put off claiming it and get a higher weekly amount or the option of a one-off taxable lump sum payment instead.

For more information you can visit The Pension Service’s website.

You can also contact the Retirement Pension Forecasting Team on 0845 3000 168 if you have concerns over what you are entitled to. Nevertheless, The Pension Service should automatically send you a claim form four months before you reach State Pension age. If you haven't received this form three months before your birthday, you can call The Pension Service on 0845 6060 265.

So, if you hoped retirement was going to be straightforward, make sure you get your finances in order! Do you really want that world cruise or just a trip to Warmington-on-Sea in a charabanc?

©BATOD Magazine May 07