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What is the Teacher Pension Scheme?

What Is The Teacher Pension Scheme

Starting a teaching career comes with a unique set of rewards, one of the most significant, though perhaps least known, is the Teacher Pension Scheme. This secure pension stands out as one of the most generous in the UK, offering several benefits. But what is it exactly, and how does it work? Let’s take a look.

This guide covers:

Teacher Pension Scheme Structure (TPS)

The Teacher Pension Scheme is a defined benefits scheme, ensuring a guaranteed income post-retirement. This is based on your salary and not just the amount you contribute.

The scheme offers the flexibility of being carried with you throughout your teaching career, regardless of location changes.

For teachers in Scotland, similar schemes like the Scottish Teachers’ Pension Scheme 2015 or the Scottish Teachers Superannuation Scheme (STSS) are available, working parallel to the TPS.

Understanding Member Types

Your membership type, whether ‘new’, ‘protected’, ‘tapered’, or ‘transition’, depends on your joining date and proximity to the Normal Pension Age (NPA) as of 31st March 2012.

Protected Members

These members stay in the final salary arrangement, provided they do not take a career break of more than five years.

Tapered Members

These members will transition from the final salary to a career average arrangement after a certain period.

Transition Members

Members who were more than 13 years and 5 months from NPA on 31st March 2012, moved to the career average scheme in 2015.

Find out if you are eligible for a mis-sold Teacher’s pension transfer claim.

The Benefits of The Teacher Pension Scheme

The TPS comes with a full range of benefits, including:

Automatic Enrollment

As a teacher, you are automatically enrolled in the Teachers’ Pension Scheme at the start of your career. This enrollment continues seamlessly when moving between teaching jobs, unless you opt to leave the scheme.

Employer Contributions

The scheme is a ‘defined benefit’ pension, primarily based on your salary, with an impressive employer contribution of 23.6%. This means that both you and your employer regularly contribute to your pension, enhancing your future financial security.

Online Management

Managing your pension is straightforward and can be done entirely online, providing ease and accessibility.

Tax Advantages

Your contributions to the pension are tax-free, as the scheme is registered with HM Revenue and Customs.

Government Support

This pension is one of only eight in the country backed by the government, offering an added layer of security as it is not dependent on external investments.

Ill-Health Protection

In case of illness during your career, the scheme allows for early retirement due to ill health.

Family Benefits

If a member passes away while actively contributing, a nominated beneficiary receives a death grant and, after two years of contributions, a continuing pension.

Steer Clear of Pension Pitfalls

The Teachers’ Pension Scheme is a comprehensive, flexible, and secure way to plan for your retirement. It not only offers peace of mind regarding your financial future but also ensures that your family is protected.

However, in the broader pension landscape, it’s important to be vigilant of offers that might not be what they seem. Mis-sold pensions are all too common, and can result in people losing large amounts of their hard earned money.

If you’re worried about your pension, give our friendly team of experts a call today. We have years of experience in helping people just like you get their mis-sold financial claim money back where it belongs.

Mk Hk
30 January 2024
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