As a teacher, you may feel blessed. Although the profession has never been well paid, the salary continues to come each month no matter the state of the economy. So, with the COVID-19 crisis causing untold financial pressures for many, the teacher can feel some comfort in knowing that they will continue to be paid. Yet, as you would imagine, there may be a future impact on pay rises – as we saw after the dramatic downturn in 2008 and the resultant austerity.
It is also fair to ask if the downturn in the stock market and levels of taxation being accrued will impact on your pension. Again, it is good news for teachers. If you are in a public sector scheme, there is nothing to worry about. Although the public sector schemes are funded out of taxation, these levels are closely monitored and maintained by the government. Unlike other schemes, the Teachers’ Pension Scheme is not impacted by movements in the stock market or the individual performance of a single company.
Private Pension Schemes
If you hold some money in a private pension scheme, you may need to speak to a financial advisor. Private pensions tend to be backed by Funds that can be adversely affected in such an economic crisis. Every three years your pension scheme will be revalued, and it is possible for problems to occur when there is a shortfall. At this point, the pension regulator has policies to help govern what should happen next.
Although there are many things for teachers to be worried about in the time of COVID-19, the profession is in some ways fortunate not to have the same financial concerns as others.
The content in this article was correct on 1st June 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.