There is a phrase you will come across a lot when reading about your pension; this is your pensionable service. Sometimes, pensionable service is also known as eligible service and is the time in employment as a teacher when you are paying into the Teachers’ Pension Scheme.
To qualify for your benefits, you need to serve a minimum of two years of pensionable service. If you leave teaching before these two years, you can apply for a refund of your contributions made during your time in the classroom.
If you choose to work part-time, you may also need to understand the difference between qualifying service and actual service. Qualifying service includes days you did not work, while actual service is the days you did work. The qualifying period at the start of teaching is judged on this qualifying service; in other words, two years of part-time work is still counted as the minimum pensionable service required. However, your benefits are calculated using the earnings you receive.
You will be given a Normal Pension Age (NPA) when you receive your benefits from the scheme. This age will be between 65 and 68. There may be a time when the age is increased, and you may wish to check the government website for updates.
You can take early retirement from the age of 55. Again, it may be that this early retirement age increases in the future. If you take your pension early, you may be subject to a reduction in the benefits paid. It is a good idea to seek advice from an independent financial advisor about the likely consequences of early retirement.
What if I leave teaching after 2 years?
If you leave active service as a teacher after two years, you cannot access the contributions you have made until you reach retirement. Your contributions will continue to grow in the scheme, as it is revalued each year. However, it will grow at a much lower rate than active members in the Teachers’ Pension Scheme.
The content in this article was correct on July 31st 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.