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Home/News/Teachers Pension/Career Average/What is the impact of working part-time on your pension?
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What is the impact of working part-time on your pension?

02/12/2019 Racheal Smith

You may be reaching that point in your career when you want to work less.  You can afford to take on fewer hours and work part-time in your school.  However, although this might be financially viable now, it may also impact on your future security when you retire.  Here we explore the impact on your pension if you choose to go part-time.

Is the service pensionable?

If you are teaching in a part-time post that started before January 1st, 2007, and you have experienced no change in your contract, then your service will only count to your pension if you have elected that it should.  This is because you are in the final salary scheme, and your last full-time salary may offer a better outcome for your pension.  To understand if you should elect to have your part-time salary to become part of your pension, you should speak to an independent financial advisor.

If you started work after 1st January 2007, then your part-time work continues to be pensionable unless you opt-out of the scheme.  Again, advice on whether you should opt-out of the scheme or not should be sought from an expert advisor.  They will be able to calculate the best outcome for you and your pension benefits.

Arrangement calculations

For those in the final salary arrangement, your pension benefits will be determined with a calculation that involves your pensionable service compared to your actual earnings to the full-time salary rate in that period.  This calculation is your earnings divided by annual salary rate times by 365.

For those in the career average arrangement, your pension accrual is based on your actual pensionable earnings.  Whatever your earnings, the appropriate accrual rate is applied to it.  To understand your benefits, you can view them on your Benefit Statement or visit My Pension Online.

The content in this article was correct on 15th November 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.

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Posted under: Career Average, Final Salary, Teachers Pension

Tagged in: Part-Time, Pension Arrangement



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