Do you really want to be 67 or 68 when you get your teacher’s pension?
At that age I do not fancy prancing around in Lycra, demonstrating handstands and physically supporting big, strong S4 boys as they attempt handsprings! Teaching is a wonderful profession, but it is physically demanding and emotionally draining. I don’t think it is possible for me to continue to teach PE effectively into my late 60’s, so I would love to take my teacher’s pension before then. On doing some research, it would seem that I am not alone in these feelings.
It’s a challenge
Teachers are concerned that managing challenging behaviour will cause more stress and be more difficult to deal with as they get older. The ever increasing workload and the constantly changing curriculum causes concern, as teachers wonder whether they really can teach well beyond 60. There are fears of being completely drained, too tired and exhausted to provide that excellent education for children that they all strive for. Then the fear of feeling trapped in the job that they once loved, because although they want to retire, they are unable to afford it.
This makes me sad. It makes me worried for the profession. It makes me worried for the next generation of pupils.
There is no doubt that teaching is a stressful job. Recent research showed that, out of 80 careers, teaching is constantly in the top 3 most stressful. In an EIS survey of 7000 Scottish teachers in 2014 there were only 16% of teachers who were reporting no current workplace stress. It’s a worry that as we get older we feel this stress more acutely.
With these levels of stress in the workplace surely more teachers than ever are looking towards early retirement, but the question is can they afford to take their teacher’s pension early? In the past many people were able to take early retirement from 55, which was only 5 years before their nominal pension age (NPA). However, although the new Scottish Teachers’ Pension Scheme 2015 (STPS 2015) still allows us to retire at 55, with the NPA being raised to 67 for many people, retiring 12 years early is likely to pose a financial problem.
Who will it affect?
Even for those who have had no break in service, and have paid fully into their pensions since they began teaching, retiring 12 years early still may not be possible. Then there are those who are likely to have less of a pension pot saved for retirement. Those who joined the profession later in life, or who put off contributing while paying off student loans, as well as those who have taken time out to have their own children, often returning on a part-time basis.
What difference does it make?
Few consider the impact that these decisions might have on their pension. I certainly didn’t 10 years ago. Teaching full-time with 3 young kids was too stressful for me, so I cut down to 0.4fte and started my own bookkeeping business. While this helped me to get a better work/life balance, at the time I didn’t fully consider the impact that this would have on my pension. With plans of travel, sport and socialising in my retirement my predicted teacher’s pension is just not going to be enough.
I suspect that I will not be alone in having a shortfall in my teacher’s pension.
In the Scottish Teachers’ Pension Scheme 2015 we are still allowed to retire at 55 and my current plan is to leave teaching then. I won’t get my full teacher’s pension until I am 67, and although I will be able to access it from my old NPA which is 60, the amount I would receive would be reduced for early payment. Realistically, I need to take action now to ensure I can have the retirement that I want.
What can I do?
Do we just have to stay on at work, because we have to, because we can’t afford to retire, because we have no option? I don’t think so. I think for me, and others in my position, the options are varied. Go back full-time? Apply for promotion? Phased retirement? Take on a second job? Plan to change jobs later in life? Start a business? Create a passive income?
What I have done is to started my own financial coaching business, helping other female teachers to sort their finances, so that they too can live the life that they want to. This online business will allow me to travel and will allow me to still have an income after leaving teaching.
My research into teachers’ pensions has shown me that many teachers are concerned about the income that they may have in retirement, but that they are also so confused about the whole pension thing that they just hope it will work out for the best.
This cannot be good.
A huge percentage of the teaching population in the UK will now be unable to access their full pension until state pension age, currently 68. This figure may yet rise, and with one in 6 MP’s saying that they think the state pension may disappear completely in the future, we need to accept that we must take control of our own destiny.
We must be responsible for our own futures and we should start preparing now.
Many teachers are under the impression that mortality rates of teachers are actually pretty grim and therefore they don’t worry too much about preparing for the future, instead concentrating on enjoying the present. However, research from the Office of National Statistics shows that male and female teachers are likely to live to 83 and 86 respectively. With average life expectancy increasing all the time, it is reasonable to assume that we are likely to live even longer than this. Therefore, even retiring at 68, we will hopefully have around a minimum of 15-18 years of retirement to look forward to.
Spending that retirement worrying about money and being unable to live life to the full will not be an appealing prospect for many. I don’t mean to paint a depressing picture, but I do mean to make you think seriously about your retirement plans. By taking action now, and checking what you can expect to have in retirement, you are able to make decisions and ensure that you are fully financially prepared for the retirement that you would like.
However, it is so difficult to know where to start.
That’s why I have created a retirement planning course specifically to help teachers to be confident, calm and in control of their teacher’s pension and retirement plans.
With 5 star feedback from teachers who have already taken it, you might like to see what the course offers.
Also feel free to join my YMS group which is designed to help female teachers to live the life they choose, through helping them to make the most of their money.
If you have found this useful please share with other member of the profession.
I am Eileen Adamson, a Your Money, Sorted coach, working online with UK based professional women, helping them to develop a better relationship with money. Helping you to implement changes will allow you to feel calm, positive and confident that you are in control and capable of making good financial decisions. I can support you to manage their finances effectively on a daily basis and create a stable, secure and exciting future for you and your family.
The views in this blog are entirely my own and I am in no way responsible for any decisions made as a result of this blog!