One of the most frequent questions we are asked by teachers and senior education leaders is around retirement and more specifically, when they will be able to leave teaching. Generally speaking, the reasons behind this appear to be not a dislike of teaching itself, but the heavy overall demands of the job and its workload. In fact, recent research from Wesleyan Financial Services revealed that 22% of teachers plan to retire before reaching their Normal Pension Age (NPA), citing detrimental impacts on their health and wellbeing. The research also found that more than two fifths of teachers (41%) plan to leave the teaching profession before the age of 60 because the Teachers’ Pension Scheme (TPS) won’t give them enough income for retirement.
During my time in financial services, when it comes to preparing for retirement, I have observed clients typically fall into one of two categories. The first includes those who believe that they will not have enough at retirement age, because their perception of what they need is different to the reality. In many cases, this is due to a lack of overall understanding of what they actually have and what these numbers mean to their future – TPS statements can be quite complex and as a result sometimes confusing. They don’t always understand how to link the pension and other sources of income such as Additional Voluntary Contributions (AVCs) or other personal pensions or investments to achieve a positive result. This is where professional support can be extremely useful – using tools such as the cash flow modeller, a Specialist Financial Adviser can map out what all these numbers will mean to your retirement, we often find that many teachers are able to retire earlier or start their phased retirement earlier than they had imagined. One of the best parts of my advising role was giving someone that “nod” and assuring them that they were financially stable enough to make that retirement decision, when they just weren’t sure.
The second category includes those who truly won’t be able to retire when they would like to – there are typically reasons behind this. It could be as simple a reason as ongoing financial commitments to their dependents, or it may be that they have made a financial decision at some point in the past which now holds them back, for example, accruing debt that runs close to, or past retirement. Generally speaking, receiving regular advice and planning appropriately long term can help client’s manage debts, save more or give clarity on their position so that whilst they know it might not be their preferred date, we can set the right date to retire, when all the other things fall into place.
There are also people who return to work post-retirement because they realise that they are simply not ready to step away just yet. They might return to work, but not as a classroom teacher, and take a less demanding form of employment. It’s always worth remembering for any situation, however, that once you take your pension from the TPS, you cannot change your mind and return it – therefore, it is never a good idea to make any radical decisions before you’ve investigated and fully understood all of your options.
The other often overlooked aspect towards building a financially resilient retirement is protecting your income. Of course, retirement planning is important, but what happens in the immediate future has the potential to drastically alter your retirement plans and your current lifestyle. Many of us are willing to pay for house insurance, our pets and even our gadgets – we are legally obliged in the UK to pay for car insurance; however some people are not willing to protect one of their most valuable assets – their income. A good question to ask yourself here, is if you were off work long term due to sickness or an injury, once your sick pay runs out, how long would any savings you have last?
Whilst many of us may feel happy relying on workplace benefits, especially in public sector work, such as teaching, where enhanced workplace benefits and pensions are considered a perk of the job by many – the reality of long-term illness or a serious injury, is that it may involve taking a period of time away from work that extends beyond any sick pay. If there are no policies in place to help for this situation, this could cause considerable financial difficulty and potentially result in not being able to cover the mortgage payments and the essential bills. Although you may well have savings, if you needed to use those to cover what your income cannot, then this would likely have an adverse impact on your retirement plans. A good question to ask is what impact would the early use of these savings have on your plans for the retirement you hoped for and are you willing to accept that outcome, if there is a route to protect yourself against it?
Therefore, I would say that there are two parts to financial resilience, one is ensuring that you have adequate funds in place and understanding what those look like, what you will be able to do and when, and if any changes need to be made and so forth. The other aspect is the ability to withstand any shocks along the way that could ultimately compromise all of those retirement plans.
There are many threads involved in financial resilience and if you’re not aware of them all, you could potentially be exposing yourself. Having regular reviews with a Specialist Financial Adviser can help to ensure that you plan effectively for your retirement and your financial future – helping to put you in an informed position so that you can make the right decisions at the right time and have the best possible outcome for your retirement.
Wesleyan Financial Services is a broker and insurance products are provided by a number of selected insurers.
About: Oonagh Morrison joined Wesleyan Financial Services, in 2009 as a Specialist Financial Consultant in the Education Market. She provided holistic financial planning advice to this market until April 2022, when she took on the Regional Manager role for the Scotland, Northern Ireland and NE England areas. She now dedicates her time to developing this established team and working with other colleagues at Head Office to ensure that the needs of the profession remain met.
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.
METHODOLOGY
Figures based on a survey of 500 teachers across the UK, conducted between the 29th April and 1st May 2025 by OnePoll, on behalf of Wesleyan.
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