Some questions are continually raised with the Teachers’ Pension Scheme. These questions reveal much about how we use our pensions and what we are concerned about in our life. Top of the list of the most frequently asked questions is about being able to afford to cut hours at work. Here we look at a response to this question.
Finding the right advice
When visiting the Teachers’ Pension Scheme website, you must go to the part-time section. Here you will find the details of the impact on your pension fund if you choose to cut your hours. While the site gives you general information about the impact on your earnings, Teachers’ Pensions cannot offer specific advice about your situation. If you hope someone will do the calculations with you and give you a definitive answer, you will need to contact an Independent Financial Advisor.
If you stay in pensionable employment and pay contributions to your pension, your fund will continue to increase, and you will be deemed an active member of the scheme. You will be treated as if you were a full-time member of staff.
The decrease in your contributions will impact the final calculation of the value of your pension. The calculation to assess this impact depends on whether you are in the final salary arrangement or career average arrangement, and some members will be in a combination of the two. Seeking support from an independent financial advisor will give you the details on your impact.
Now and in the future
When you ask if you can afford to cut your hours, you have two thoughts in mind. First, can I afford to live comfortably now while still working? Second, will it mean I can afford to retire when it comes? Both are crucial in your decision-making about moving from full-time to part-time.
The content in this article was correct on 29th March 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.