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:
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.
Unfortunately, these latter activities all involve money. The questions are, therefore, ‘Will you have enough?’ or ‘Are you going to be linked to ‘Poverty’?’
In addition, have you investigated:
And/or have you:
©BATOD Magazine January 07
|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!)
|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 years||10 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:
Tel: 0845 6066 166 |
Text Phone: 0845 6099 899
The Teachers' Pensions website |
©BATOD Magazine March 07
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.
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