In the ever-changing world at the chalk-face, most would agree that one of the true remaining perks of becoming a teacher is one of the best occupational pensions in the UK, relatively safe and with some benefits and perks you don’t get in Defined Contribution pensions.
I mean, there’s got to be some substantial compensation for endless marking, planning, OFSTED inspections, wet-play and that little darling Kieron in class 3 with his delightful parents, right? No matter what anybody says, those 6 weeks in Summer still feel like nothing more than a long weekend, and a good pension is often seen as valuable remuneration for years of hard work.
Not only do final salary or career average salary pensions (let’s give them their proper names: Defined Benefit Pensions) such as Teacher’s Pensions keep pace with inflation, but they come with a number of benefits on top, which means if you’ve been talked out of your pension with the promise of greater returns, then the topic might be worth revisiting for a moment.
We know you teachers are busy, so we’ve given you the short version!
Note: Pensions are notoriously complex and there will be some exceptions to the example provided, but most fit these rules if you’ve not had any breaks in service or further complications. Start dates also effect whether you can look forward to a final or average salary pension.
Your UK Teacher’s pension explained:
A lot depends on when you started teaching, but here’s how most of you educators will see it at present.
If you were teaching before January 1st 2007 without any breaks of more than 5 years, your Normal Pension age is 60.
If you started teaching after 1st Jan 2007, your NPA is likely 65.
How much will I get:
NPA of 60 years old would receive:
(Years of Service x Average Salary)/ 80 and a lump sum equal to x3 your pension
NPA of 65 years old would receive:
(Years of service x Average Salary)/60.
More precise and in-depth information on teacher’s pensions is available at www.teacherspensions.co.uk
SIPPS and “the grass is greener”.
That’s the normal pension covered, but now we need to talk about something that could be a lot worse than that pound-shop blown-glass vase and “bubblegum” scented candle you got for Christmas – “Yes, thank you Jamie, now get on with your Singapore Maths”.
A mis-sold pension transfer away from the relative safety of your teacher’s pension…
Over the last 6 or 7 years, there’s been a huge increase in the number in mis-sold pension transfers. Many cases feature the holder of a good pension (such as a teacher’s average or even final salary pension scheme) being convinced to move into what’s known as a SIPP: Self-Invested Personal Pension.
A SIPP can be great: it’s a tax efficient pension wrapper for a wide variety of investments, some of which promise some serious returns, over 10% in some cases!
But here’s the catch: many of these investments are UNREGULATED by the Financial Conduct Authority, and of a High-Risk nature, suitable only for High-Net Worth Individuals (earning over £100,000k per year) and Sophisticated Investors (people with a wealth and knowledge of investing), and in some cases this is not made explicitly clear.
Sadly, most teachers don’t fall into this category. So why were they persuaded to opt-out of a safe scheme and into something riskier?
We’ve no doubt your classroom position regularly puts you in the role of “Class Detective”. Just who did leave the tops off the glue sticks? Did Harrison really put a spider in Jane’s hair? What was his motive?
Well, if we were to tell you that a financial adviser could have earned up to 15% of the total pension value in commission for a transfer of your pension into SIPP investments, does that make you think?
Have you got a mis-sold pension?
Maybe! These high-risk and unregulated investments often feature things like forestry plantations, overseas property, land banks, storage pods, unlisted shares, carbon credits, bio-fuels and more.
If any of that’s now ringing more alarm bells than a Monday morning call from Ofsted then you’re best of reading a little further.
SIPP suitability and making a claim
If you don’t fit the bill as a High Net-Worth Individual or Sophisticated Investor, and would never have transferred your teacher’s pension into a risky SIPP investment had you been made fully aware that it was unregulated and high-risk then you could have been mis-sold, and could be due compensation.
Get Claims Advice Ltd deal with this sort of situation every working day of the year, and we offer our claims handling services on a No Win – No Fee basis*, tracking down just who sold you your pension, uncovering how they did it, detecting any mis-selling and bringing it all to justice with the proper authorities to put your retirement back on track.
A mis-sold pension can be devastating for anybody, even worse if you consider that you might have been convinced to leave a perfectly good pension to get it.
If this all sounds a bit too familiar, get in touch with Get Claims Advice for free to see if we can help you rescue your pension and ensure all those years at the chalk-face provide you with the retirement you deserve.