Research by Wesleyan – a specialist financial services mutual for teachers – has found that more than one in five (21%) headteachers at schools in England have accelerated their retirement plans over the past 12 months, with nearly one in 10 (8%) now planning to retire before the end of next year.
Schools in England are facing a ‘retirement rush’ as their most senior and experienced teachers bring forward their retirement plans amid the pressures of the pandemic – despite many lacking confidence that they are financially ready for retirement.
The research found that almost a fifth (19%) of teachers with more than 20 years’ experience are now planning to leave the classroom early, with those who have changed their plans pointing to a lack of work-life balance (83%), workload (72%) and stress (70%) as their biggest drivers for an earlier retirement.
Despite this new ‘retirement rush’, just six per cent of teachers with more than 20 years’ experience and nine per cent of headteachers said they were highly confident that they were financially prepared for retirement – that they had enough in savings, investments or their pension, and that they had a plan in place.
Worryingly, more than a quarter (28%) of the most experienced teaching staff and a fifth (21%) of headteachers admitted they were not confident at all about their financial preparations.
Simon Rake, head of the teachers division at Wesleyan, said:
“Considering the stresses teachers have faced this past year it’s not surprising that many are now reconsidering their retirement plans. But what is worrying is that so many are doing so despite not feeling ready financially to leave work.
“Some teachers will find themselves between a rock and a hard place – deciding whether to risk retiring earlier without understanding how and when they can access the money they need, or continuing to work in conditions that may be taking a toll on their wellbeing and mental health.”
Wesleyan’s research also found that a majority of senior and long-serving staff members were unaware of what ongoing changes to their pension schemes – particularly measures to remedy discrimination in public sector schemes often referred to as the ‘McCloud’ case – would mean for them.
Three fifths (60%) of teachers with more than 20 years’ experience and more than half (51%) of headteachers said they had never heard of the changes – despite it having a potentially significant impact on their pension pots.
Simon continued: “Planning for retirement has become increasingly complex for teachers, which could be feeding into their lack of confidence when it comes to financial plans.
“Over the past six years, those in the Teachers’ Pension Scheme (TPS) have seen a move to a career average revalued earnings scheme, the new choices offered by pension freedoms and, more recently, the ongoing changes brought about by the McCloud case.
“Understanding what each one of these changes will mean for their own pensions is key to being able to retire with confidence.
“Even if they’re not considering early retirement, it is essential that teachers take the time to assess their own finances, understand what options they have available and put a plan in place so that they are in the strongest possible position when the day eventually comes.”