While work events can impact your pension benefits, there are also life events that can come along too. As we consider these life events, it is worth remembering the importance of checking in with your pension and seeking independent financial advice.
New relationships
Getting married or being in a civil partnership can impact the benefits received from your pension. If you were to die in service, your partner may be entitled to a lump sum and an ongoing pension. You can also nominate a beneficiary of this benefit, and you can keep this up to date on the My Pension Online portal.
A new baby
When you are about to welcome a baby into your family, you may choose to take leave. If you receive contractual or statutory pay during the maternity, paternity, or adoption leave, your pensionable service will continue. While your contributions will be based on the pay you receive during the leave, you will still accrue years of service. To be considered pensionable, you must receive at least half your salary or statutory pay.
The good news is that your pension benefits also cover a new dependent in your life, should you die in service. Any child under 23 still in full-time education will receive benefits from your pension.
Divorce
The end of a relationship can be tricky, and your pension could be impacted. You may be asked the value of your pension during the divorce, and a court may award a percentage of your pension benefits to your ex-partner. Your ex-partner may become a pension credit member of the Scheme and will not be allowed to transfer this benefit or add flexibilities to boost its value.
Ill-health
Claiming your pension early should you become too unwell to work may be possible. You will need to apply for ill-health retirement, which means you can access your pension before your Normal Pension Age. Your employer must arrange occupational health support and agree to the process before applying.
Conclusion
This high-level information about some of the issues that impact us in life is only a starting point. To know more about how your life choices might impact your pension, you should speak to an independent financial advisor. While the Teachers’ Pension Scheme can offer information, they are not permitted to offer advice on your specific situation.
The content in this article was correct on July 31st, 2022. 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. The value of your investment can fall as well as rise and is not guaranteed.