Pension Options for the Over-55s

(and between 50 and 55 up to April 2010)

Advice from Suffolk NUT

Pension decisions are complicated and you can lose out by not taking proper advice. The regulations often change and the small print often excludes certain options for certain situations. The information on this page is intended to help members to consider all the options. The information refers to Suffolk LEA teachers over 50. Members are advised to seek detailed advice on any pension decisions from the NUT Regional Office, 01638 555300.

Click on the links below for further details

You cannot normally retire on a teacher's pension until age 60, but you can take an actuarially reduced pension from age 55.
In a redundancy situation only, early retirement on the grounds of redundancy may be available from age 50 (up to April 2010).  After April 2010, no early retirement on the grounds of redundancy or efficiency will be available before age 44.


In the past, from age 50, certain step-down options became available, one of which enables you to preserve a higher salary figure as the notional final year's reference salary for pension purposes, if you step down from a post of responsibility with an allowance or other higher salary. These options are now closed and replaced by new "flexible" forms or retirement.


If you leave teaching service before retirement age, your pension will be "frozen" until age 60, but index linked (with effect from age 50). You can withdraw your pension benefits (normally not advisable!) or transfer them to another pension scheme, in which case you need to check that the new benefits are at least as good as your "frozen" benefits.


All "index linking" for pensions purposes is tied to the Retail Price Index. See also definition of "Final salary".


It is not possible to make up the difference between full time and part-time pension contributions (i.e. part time work will always accrue service at a slower rate: you need to teach for two years on .5 fte in order to accrue 1/80th final salary entitlement.


Suffolk no longer offers early retirement on the grounds of efficiency except through rare cases of individual casework.


At age 55, you are able to take an actuarially reduced pension. This means that you lose about 5% of your pension for every year less than age 60. So if you retire at age 55, you lose about 25% of your pension. This reduction lasts for as long as you live. Your pension is never restored to the full value that would have been payable at age 60.

If you have retired on an actuarially reduced pension, you can still work as a teacher (after a break of at least one day), and still pay into the teacher's pension scheme (up to age 60 or 40 years' service). The rule is that your annual earnings from teaching plus your pension for that year must not come to more than you would have earned if you had stayed full time in teaching. When you eventually retire from teaching altogether, you could have a small second pension.
There are alternatives to taking an actuarially reduced pension, apart from just continuing with your current contract:
  - Step down to a post of less responsibility (if you currently have an allowance or are on leadership spine/advanced teacher spine), but stay in teaching (and in the teachers' pension scheme)
  - Stay in teaching but reduce your hours /go part-time.
  - Resign and go to work elsewhere, freeze your teacher's pension until age 60 and pay into your new job's pension scheme, if it has one.
  - Resign, go to work elsewhere, and pay "combined contributions" for up to three years to top up your teachers' pension. Combined contributions means that you will have to pay both the employers' and the employee's contributions, but both are tax-deductible.