As a teacher, you are aware that you have a generous pension scheme. You may also feel that it is time to take a break from service when your children arrive. Any gap in service is going to impact on your pension in some way. Here we lay out some consequences if you are planning a gap in service for your family.
It is good news!
If you choose to take maternity, paternity, leave for adoption, or any other family leave, the amount of pension you accrue is not impacted while you are still in pensionable service.
You will pay less contributions while you are on family leave.
Be aware; you will remain in pensionable service when on family leave as long as you receive at least half your pay or any statutory pay.
It gets better
There are more benefits from staying in the Teachers’ Pension Scheme when on family leave. If you do, you will maintain the valuable in-service death benefits. This is a grant of three times the annual full-time equivalent rate of pensionable earnings. The scheme will also pay qualifying beneficiaries; for instance, your children may benefit too.
If you are going on family leave, you may be tempted to opt out of the Teachers’ Pension Scheme. It is not surprising – maternity and paternity leave also means an expensive new human being in your life. However, you might want to think twice before making this decision, as the loss of benefits could be significant.
The content in this article was correct on 25th February 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on the Teachers’ Pension Scheme. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.