The Educator Magazine U.K. Sept-Dec 2022 - Magazine - Page 21
HALF OF TEACHERS
FACE PENSION
FUNDING SHORTFALL
• Nearly half (48%) of teachers expect not to have enough money to fund their retirement
• Three quarters (75%) of teachers plan on leaving the profession before retirement age
• Nearly a third (29%) want to find other work outside of teaching
• (37%) of teachers will need to keep working in some form to fund retirement after they
start drawing their pension benefits.
Almost half (48%) of UK teachers say
they will not have enough money to
fund their retirement– highlighting
a potential retirement ‘funding gap’
within the profession according to
new research from Wesleyan, the
specialist financial services mutual
for teachers.
Three out of four (75%) UK teachers say
they are looking to leave the profession
before the normal retirement age for
their pension savings, but many haven’t
enough saved up enough to fund their
retirement.
The research also showed a trend in
‘flexi-retirement’ – teachers continuing
to work after they have ‘retired’.
Nearly two fifths (37%) of respondents
to Wesleyan’s survey said they will
need to keep working in some form
after they start drawing their pension
benefits.
The main reasons for doing so were to
generate income for luxuries (27%) and
one in six (14%) said they would need
to work to ensure they could meet their
basic needs.
The results found that many teachers
are confused by the TPS, just a third
(34%) of teachers said they fully
understand the TPS rules around
‘phased retirement’.
These give teachers the option to
access up to 75% of their TPS benefits
while still working and contributing to
the scheme – but require changes to
working patterns and salary as a result.
Additional research with members of
the teachers’ union the NASUWT found
that 22% teachers planned to take early
retirement because of stress/workload
pressures. A further 21% stated that
they were retiring early to have a better
work/life balance (21%)*.
Retirement Living Standards
guideline is that an individual will need
£33,600pa in retirement to live
comfortably**. This means they will
be able to cover everyday cost plus
pay for some luxuries such as holidays
and beauty treatments. However, the
average pension for a male teacher is
£16,034pa and £11,581pa for a
female teacher.*** This would mean a
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shortfall in income of up to £22,019 in
retirement. This shortfall will reduce
to approx. £12,392 if the full flat rate
state pension is paid from state pension
age.***
Simon Rake, Head of Education at
Wesleyan, said: “It is concerning to see
that so many teachers are worried or
confused about their retirement.
“The traditional concept of retirement
as a time when people fully leave the
world of work behind is becoming more
and more outdated. As our findings
show, teachers are increasingly
choosing to work in retirement.
For a small but nonetheless significant
proportion, it will be a necessity so
they can meet basic needs – a worrying
finding.
“It is important to start retirement
planning from an early age and factor
into your plan flexi retirement options.
This is vital because the TPS has phased
retirement regulations, so some may
find they need to either reduce
teaching hours or move to a less senior
position, in order to stay eligible for
benefits. A specialist adviser can help
navigate all of these considerations.”