The current focus on our health can make us worried about our future—the presence of a pandemic and new insecurity about health and work. You may have already thought about what would happen should you contract the illness and you need months off work, or do not feel that you can go back to work. Here we offer a summary of the impact of ill-health on your pension.
Sick pay and your teacher’s pension
If you are off sick for less than six months as a teacher, there should be no change to your pension accrual. You are paid fully during this initial period, and so your pension contributions will continue as previously.
If the illness extends beyond six months and up to a year, then you will be on half-pay. You will pay a proportional amount towards your pension, and so accrual rates will be at 50% too. If you need to opt-out of the scheme to maintain your daily costs, then this could be possible. You will need to seek advice from an independent financial advisor on the consequence of this decision.
Non-pensionable Sick leave
If you’re unwell beyond a year, you will move to non-pensionable sick leave. If you have yet to reach your Normal Pension Age (usually somewhere between 60 and 67), you will cease to accrue pension benefits.
However, you will remain eligible for in-service death grants for another year – if you were out of teaching because you were incapacitated. You will be treated as making an ill-health retirement application if the application is received within two-years of leaving pensionable service.
For some, the impact of an illness can be such that they do not feel they can go back to work. Indeed, if you spend time in intensive care, you will need a lot of time to get back to your usual self. You may also have a changed perspective on how much stress you can cope with.
If this happens, and we sincerely hope it does not, you will need to seek advice as to whether ill-health retirement is possible. You will need to go through an application process, which aims to determine if your incapacitation prevents you from continuing your service.
The content in this article was correct on 25th April 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.