Teachers Pension Contributions?

Question

I am a student and am thinking about the future and working out my finances for once i start earning next year.

I don't really understand how pensions work or the type and amount of pension i will recieve as a government employed teacher.

What percentage of my wages will i be paying pcm for pension?

Does this money come out of my pay cheque automatically and do i have a say in it? For example can i opt to pay more for my monthly contribution so i have a larger pension when i'm older?

Thanks for any input as i'm very confused and would like to get this sorted.

Answer 1

If you are a UK teacher you do not make any contribution, the taxpayer pays it for you! If you wish to enhance an already generous pension then see your employer about taking out some A.V.C's. These will bring your final pension up to a better amount.

Answer 2

Not sure of the percentage but I know it comes out automatically.  

Answer 3

The Teacher's Scheme is a State Sponsored Scheme.  Basically when you retire you get an eightieth of your salary for each year you've been working plus a lump sum of three times as much - so after 40 years you retire on half salary and a lump sum of 1.5 years' salary.  The Scheme gets a bit more complicated because there are special rules about retiring on full pension in particular circumstances although the government is trying to get rid of this part.

Contributions are 6% of your salary deducted at source.  You don't pay tax on the contributions.

You can opt out of the scheme (unlikely to be a good idea) and you can pay extra to buy more benefits (although another savings scheme might be better value for money).  Once you've been working for a few months and you're happy with your income and outgoings, have a word with a financial adviser

Answer 4

Sorry but Bremner8 is talking utter rubbish. All UK teachers, who do not opt out of the Teacher pension scheme, pay contributions which are usually matched by their employer. This is one of the best schemes in the UK which is why all teachers are automatically entered in to the scheme and must sign a declaration to opt out. For specific information about paying extra you should contact the pension advice service, your school will give you contact details.