If the news is to be believed the general sense of burnout that you could be feeling is likely shared by many. The number of people leaving the profession is on the rise, as they seek an alternative career away from the classroom. While we can mourn the loss of talent, the essential message here is that you might stop work in your school too. Consequently, at some point, you may need to consider what happens to your pension if you leave the teaching profession.
What happens to your pension?
When you leave teaching, you have choices of what you can do with your pension. You can choose to leave your benefits in the Teacher Pensions’ Scheme. You will then be known as a deferred member. Alternatively, if you start a career in another sector with a similar pension scheme, you can transfer your benefits across. However, if you have less than two years’ pensionable service and you have not previously taken your benefits, you can request repayment. If you ask for this payment, you will receive everything held in the scheme, with National Insurance contributions deducted.
Becoming a deferred member
Choosing to leave your money in the scheme and to become a deferred member does not mean you lose out. If you have served two years’ pensionable service, you will qualify for benefits when you retire. Plus, if you then become an active member again, your contributions will continue to rise.
When you retire, the amount you have accrued in any periods of pensionable service will then be available as pension benefits. You will qualify for a lump sum and a pension. However, it will be much reduced in comparison to what it would be if you had continued service.
Less than two years’ contributions?
If you have tried teaching and know it is not for you, then you may leave before two years’ contributions have been paid. If this is you, then you should request a repayment once you have been out of service for more than a month. You will not be able to restore this service in the future if you choose to return to teaching.
The content in this article was correct on 10th March 2020. 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.