Each year HM Treasury release a percentage amount that should be used to revalue public pension schemes. This revaluation is intended to keep the pension fund in line with inflation, so money paid in the 1980s at the start of a career is of a similar worth than if you paid it today.
Figures for 2021
HM Treasury has released the figure to be applied in 2021. The treasury has calculated an amount of 0.5% to be added to the pension fund of those with a Teachers’ Pension, including deferred members.
The Teachers’ Pension Scheme then add an additional 1.6% to the pension funds of active members. Active members are those in-service and contributing to the pension through their salary. You do not receive this amount if you are a deferred member, which means you are not teaching or do not contribute to the Teachers’ Pension Scheme.
Consequently, as an active member, your pension fund will be increased by a total of 2.1% in 2021.
This pension increase will also be used to revise other elements within the Teachers’ Pension Scheme. Those elements impacted include maximum extra pension, restricted salary, and maximum earnings for someone receiving a child’s pension.
What does this mean for me?
If you would like to discuss how this revaluation impacts your pension fund, you might wish to contact an independent financial advisor for guidance.
The content in this article was correct on 22nd January 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.
