Teachers in the UK see the Teachers’ Pension Scheme (TPS) as one of the profession’s biggest strengths, especially for attracting and retaining staff. However, research from Wesleyan Financial Services highlights a growing difference between the value teachers see in the scheme and how clear they are about the benefits they’ll get.
In a survey of 500 educators, more than a quarter (26%) said the TPS has made them more likely to stay in the profession. This rose to more than a third (37%) for younger teachers aged 18-24. But many also cited concerns around affordability, clarity and how well the scheme supports their long-term financial wellbeing.
What are the issues?
Wesleyan’s research suggests that while teachers still see the TPS as a big benefit, they want more clarity, flexibility and visibility over their pension benefits.
- 71% believe the benefits are not as generous as they used to be
- High contribution rates are a growing concern when it comes to affordability
Why the TPS still matters
Despite these concerns, teachers do acknowledge the core benefits of the scheme, including:
- Guaranteed, inflation-linked income in retirement
- Online tools to manage and monitor your pension
- Phased retirement options that support flexible working later in life
As a defined benefits (DB) scheme, these features are highly attractive, especially when compared to defined contribution (DC) schemes where retirement income is based on investment performance which may not provide a guaranteed level of income in retirement.
What wider financial pressures do teachers face?
Pension perceptions are just one part of the financial problem for teachers. The research found that many educators are juggling rising living costs, increasing workloads and growing pupil wellbeing responsibilities.
- 27% feel negatively about their current financial wellbeing
- 20% save when they can but lack a long-term plan
- 12% have goals but struggle to stick to them
- 15% live pay cheque to pay cheque
Outside of general finances, many teachers are also having to adapt to provide social, emotional and sometimes financial support for their pupils. Particularly when students attend school hungry or without books and stationery to actively take part in learning.
What do teachers want for the future?
When asked what they would change about the TPS for future generations, teachers were clear:
- 62% want improved benefit levels
- 50% want clearer and more instant updates on their pension values
- 42% want more flexibility in contributions
Steve Renfrew, Head of Education at Wesleyan explained:
“The research shows that teachers recognise the significant strengths of the Teachers’ Pension Scheme, particularly the security of a guaranteed income in retirement. But they also see room for improvement.
“Rising living costs have sharpened focus on overall benefits, while calls for greater transparency and flexibility reflect a desire for more control over long-term finances and how they plan for retirement.”
What can teachers do to strengthen their financial position?
While changes to the TPS may take time, there are steps that teachers can take today to get their finances in a good place:
- Get profession-specific financial guidance
A Specialist Financial Adviser who understands the education sector can help you to build a plan that reflects your career path, pension structure and personal goals.
- Build flexibility into your financial plan
As your circumstances change, so will your financial goals. So, it’s important to review your financial plan to ensure it’s always fit for purpose.
- Stay informed about TPS updates
Stay in the loop with changes to the scheme. Ensure you’re signed up to updates from the TPS.
Wesleyan Financial Services are experts in providing financial guidance to teachers and education leaders. If you’re looking for guidance tailored to you and your profession, they can create a plan to help you reach your financial goals and to guide you through the complexities of your pension scheme. Charges may apply.
Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority.
Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.
VAT number 487282114
