- 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 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.”