When all the confusion and chaos in the world has passed, you may think it is time to grab new opportunities. Living and working abroad is an exciting adventure. However, you may worry about what it means for your finances into the future. Here we explore the consequences of choosing to work abroad on your pension.
Your member status
If you make the move abroad, you will no longer be considered an active member of the Teacher Pensions’ Scheme. There are exceptions, for instance, if the school you work for abroad is a member of the Council of British International Schools (COBIS). However, in this scenario, you will be expected to apply to participate in the scheme. Equally, the school may fall under Article 2 of the European Schools order of 1972, which might allow you to participate. Yet, with the changing status of the UK and the number of participatory schools quite low, you are unlikely to qualify to be a member.
What this means for your pension
You can leave your benefits in the scheme. Where you live should not change the amount of your pension in sterling. However, if you claim your benefits at a future date, your pension may change dependent on currency rates. You should be careful to update your contact details on My Pension Online to help the Teachers’ Pension Scheme keep track of you.
The process for applying for a pension is no different abroad than it is if you live in the UK. The online application will merely require details on your country and the bank details within this country.
Your death benefits are also still payable. As you are likely not a member of the scheme, your close relatives will receive deferred member death benefits.
Returning to the UK
If you return to the UK and begin teaching again, you will be auto-enrolled in the pension scheme. If the time since you were last a member is less than 5 years, you will continue as you did before. However, if you have been away for more than 5 years you will start at a different rate. You might be able to transfer any payments you have made to a scheme in the country you have just lived if the scheme is recognised. You should check the HMRC list of Recognised Overseas Pension Schemes.
The content in this article was correct on 15th May 2020. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on the different types of retirement available with the Teachers’ Pension Scheme. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.
