Teachers’ pensions and applying for retirement

Introduction

The prospect of finally being able to claim your Teachers’ Pension and put down your marking pen for the final time can be exciting. But there are a few things you need to do before you bid a fond farewell to the classroom.

If you’re between 6 months and 2 years away from retirement, now is the time to start planning and taking the necessary steps to ensure a smooth transition into retirement.

The guidance below is based on the retirement timeline for a teacher hoping to retire before the start of the next academic year in September.

When can I apply to retire?

When you can apply to retire will depend on several factors, including which Teachers’ Pension Scheme (TPS) you’re in. Typically, your Normal Pension Age will be 60, 65 or state pension age. Early retirement can be taken from the age of 55, although this is proposed to rise to 57 by 2028. So, if you’re thinking of retiring earlier, now is the time to make a start.

If you’d like to retire prior to the start of the next academic year, you should let your employer know before making your formal application.

For multi academy trusts, each academy will be considered as a standalone employer. So, if you teach across more than one academy or school site, you’ll need to inform each one separately.

You can start the application process on the TPS website by logging into My Pension Online, in March or April. However, if you’re in a leadership role, such as a deputy head or headteacher, you will need to apply 3 months earlier.

Although it can be tempting, don’t try to submit your application before this time, as it could impact your benefits.

If you’re keen to understand what your pension benefits could be prior to making an application, a Specialist Financial Adviser from Wesleyan Financial Services can provide guidance.

Our Advisers will typically start working with customers two years prior to their intended retirement date so they know what to expect. They can even help you to make the online application.

Along with calculating what you may receive from your pension, an Adviser can find the most tax efficient ways for you to take your cash, plan investments and what to do with your lump sum. Please note that Adviser charges may apply.

How long does it take?

The application process can be done online, with no physical forms or letters to print. So, you’re not reliant on waiting for anything by post. You’ll also be able to view the progress of your application via the task tracker on the TPS website.

The TPS recommends that every teacher who wishes to retire that year, start the process 6 months in advance of the date they would like their retirement to start. This is to allow time for your employer to complete their side of the process and for those with transitional arrangements to be properly processed.

Early progress can be slow, so to keep things moving, it’s important to keep an eye on your TPS tracker so you can respond promptly to requests for further information.

Your task tracker on the TPS website will show when you’re approaching the end of the process. You’ll also receive confirmation from the TPS once your application has been processed and is complete. This will also confirm your retirement date (as agreed with your school or academy).

Once you’ve retired, you can expect to receive your first pension payment the day before your birth date in September. So, if you were born on the 7^th January, your payment will be made on 6^th September.  Future payments will be made on the day before your birth date each month.

What does a TPS retirement timeline look like?

What should I do now?

If you’re a teacher on the TPS or a headteacher hoping to retire in the next two years, it may be worth seeking guidance from a Specialist Financial Adviser.

They can discuss your retirement goals and help you plan for them with projections for what you can expect from the scheme and what your monthly payments are likely to look like.

A lump sum payment can be nice to see in your bank account, but with sound investment advice, you can continue to make your money work for you well into retirement.

Although the guidance provided here is for members of the Teachers’ Pension Scheme, we can still help you to prepare for retirement if you are an educator who is part of a Local Government Pension Scheme (LGPS) or a similar arrangement.