It has undoubtedly been a tough time to be a teacher. The need to adapt to the pandemic over the last two years has been exhausting. From learning to deliver lessons from a laptop to the hybrid of online and offline, the pressures stacked up. Add to this the need to maintain bubbles, the concern for your health, and the restrictions imposed on the physical space; many teachers are exhausted.
This might be the time when you are considering a break from teaching. You know you don’t want to leave the classroom forever. However, you need a period of recuperation and maybe even space to love the job once more.
In this month’s series of articles, we look at the consequence of such a break on your pension. Here we explore what is meant by a disqualifying break.
What is a disqualifying break?
A short break from teaching may do little to impact your pension. You may be out of pensionable service and so not adding to your fund, but you remain within the scheme. However, this is considered a disqualifying break for protections of your Final Salary arrangement pension after five years.
Understanding the impact of this disqualifying break depends entirely on the type of member you are, whether it is protected, tapered, or transition. Equally, if you are a member of the Career Average arrangement only, then the ramifications for your pension differ. Consequently, it is important to speak to an independent financial adviser before considering a break in service to help you understand the impact on your pension in the long term.
It might be that you decide to move to another career. If this career allows you to join another public service pension scheme, such as the NHS, then any service done will not count towards the five-year disqualifying break. Again, the details of this are impacted by the type of member you are. It is advisable to seek independent counsel on the long-term effects on your financial security.
The content in this article was correct on September 26th, 2021. 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.