Financial advice for teachers

Geuze · 04-08-2020 12:08pm

Teach30 wrote: »

With the example... I would look at the pay scale and see what I would be be on and then if it’s 1/80 of it divide that number by 80? And if I work 40 years I divide the number by 40 no?
Sorry totally don’t get it.

Pensions are a bit complex, yes.

For simplicity, a typical teacher retiring now, gets a pension as follows:

Pension = (years of service)(1/80)

Lump-sum = (years of service)(3/80)

It is more complex for PS hired since 2013, who are in the new Single PS pension scheme.

Teach30 · 04-08-2020 12:10pm

Geuze wrote: »

SRCOP = standard rate cut-off point, the point at which workers move to the top tax rate 40%.

Also known as tax bands.

See here:

https://revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

It's 35,300 for a single person.

Check your payslip, and/or your Certificate of Tax Credits.

Thanks So much for taking time to explain it.
So my payslip says tax credit of 1650 and my cut off point says 17650. Would this be right?
I’m single.

Can’t log into revenue they have to post me a pin code so will wait for that.

StackSteevens · 04-08-2020 12:15pm

By any chance would you be one of the wise hoarders who has kept your P60s - or even your last payslip for each calendar year - since you started to teach?

Millem · 04-08-2020 12:16pm

Teach30 wrote: »

Thanks So much for taking time to explain it.
So my payslip says tax credit of 1650 and my cut off point says 17650. Would this be right?
I’m single.

Can’t log into revenue they have to post me a pin code so will wait for that.

Do you not get the flat rate expenses?
https://www.asti.ie/pay-and-conditions/pay/taxation/

StackSteevens · 04-08-2020 12:19pm

am_zarathustra wrote: »

Solid advice here. Cornmarket are good because they understand teachers but they will try and sell you their product which might not be the best so as stated above, try and do a little research

Exactly.

Bear in mind that Cornmarket are owned by Irish Life (IL) so their consultants aren't able to give you financial advice about non-IL products.

Teach30 · 04-08-2020 12:25pm

Millem wrote: »

Do you not get the flat rate expenses?
https://www.asti.ie/pay-and-conditions/pay/taxation/

Sorry, How would I know if I did?

This is why I would gladly pay an accountant or someone to do all this for me..!

Teach30 · 04-08-2020 12:28pm

StackSteevens wrote: »

By any chance would you be one of the wise hoarders who has kept your P60s - or even your last payslip for each calendar year - since you started to teach?

Ha ha I have them but dont open them.
I’ve a bundle of revenue letters too but not opened either. Actually what do other people do with them? Should I bin them.

None of this was part of learning how to be a teacher..!

I appreciate everyone’s help.

I’m not worried about AVCs right now I’d prefer to get the basics right first and understand them before I move to all the pension stuff as at the moment I’m feeling overwhelmed with just this.

Again this is why I’ve never asked anyone else in the staffroom - I’m embarrassed that I’m clueless about it all and it’s easier not to ask then.

heldel00 · 04-08-2020 12:28pm

Started fulltime 2005 (had previous service but had a gap of 26wks so am on the middle post 04 pension)
Will have 40 years done by time I'm 60 but won't have access to state portion of pension until 65.
Are AVCs beneficial to likes of me? (I've stopped and started them iver past few years)

Irks me that even if i stay until 65 pension will not increase as 40 yrs is the max.

(Sorry Teach30 for hijacking thread but i suppose more questions asked, more enlightened we'll be - ring the Dept and ask gor statement of service. This will have every hour you've ever done on it)

Millem · 04-08-2020 12:32pm

Teach30 wrote: »

Sorry, How would I know if I did?

This is why I would gladly pay an accountant or someone to do all this for me..!

Your tax credits. You need to log into revenue or ring them and see what is being applied.

Treppen · 04-08-2020 12:48pm

I know there's a few on here who would encourage you to work it out yourself op and id agree with that... Especially if they help.

BUT companies like Cornmarket (I've used PSRA too and the guy was very good) could give you small bits of advice during your 'free financial review' . Here's the deal though... They'll give you a review for about 30 minutes if you have your payslip and years of employment etc, but they'll pitch you products at the end like health insurance or payment protection. Hear them out too because I've known people who have saved a lot of money on health insurance and luckily signed up to payment protection before getting a serious illness. Bring a notebook and take notes.

As regards the private party you need to be very careful , if you didn't get any Department pay for a period of 26 weeks after 2012 during this, you'll be kicked into the 2012 new pension scheme.

When did you work privately ?
How long?
Did you get any dept payslip during that.. even for one hour?

Putting money into buying back service or AVCs need to be weighed up with other financial decisions. Pay off mortgage earlier! Use that money to save for mortgage now! Save for kids college if they're starting soon.

Teach30 · 04-08-2020 1:01pm

Treppen wrote: »

I know there's a few on here who would encourage you to work it out yourself op and id agree with that... Especially if they help.

BUT companies like Cornmarket (I've used PSRA too and the guy was very good) could give you small bits of advice during your 'free financial review' . Here's the deal though... They'll give you a review for about 30 minutes if you have your payslip and years of employment etc, but they'll pitch you products at the end like health insurance or payment protection. Hear them out too because I've known people who have saved a lot of money on health insurance and luckily signed up to payment protection before getting a serious illness. Bring a notebook and take notes.

As regards the private party you need to be very careful , if you didn't get any Department pay for a period of 26 weeks after 2012 during this, you'll be kicked into the 2012 new pension scheme.

When did you work privately ?
How long?
Did you get any dept payslip during that.. even for one hour?

Putting money into buying back service or AVCs need to be weighed up with other financial decisions. Pay off mortgage earlier! Use that money to save for mortgage now! Save for kids college if they're starting soon.

I know I’m trying to figure it all out but as usual I am feeling stupid and have no patience for reading up on it so while I’m trying my best my lack of understanding makes me not want to.

AVCs are above my head right now. I have no children or mortgage thankfully and won’t have one either.
I did have some hours for dept with I was paid in private school.

I have emailed financial section and I can’t log into revenue online until they post me a password - I don’t have two forms of Id to register right now.

Geuze · 04-08-2020 3:19pm

Teach30 wrote: »

Thanks So much for taking time to explain it.
So my payslip says tax credit of 1650 and my cut off point says 17650. Would this be right?
I’m single.

Check what the tax credits figure is on your payslip.

Multiply it to an annual figure.

Then compare that to what it should be:

personal single tax credit = 1650
PAYE tax credit = 1650

Total = 3,300

Geuze · 04-08-2020 3:20pm

Teach30 wrote: »

Ha ha I have them but dont open them.
I’ve a bundle of revenue letters too but not opened either. Actually what do other people do with them? Should I bin them.

Open them now, and read them.

Geuze · 04-08-2020 3:22pm

Teach30 wrote: »

Thanks So much for taking time to explain it.
So my payslip says tax credit of 1650 and my cut off point says 17650. Would this be right?
I’m single.

If this is correct, and you are getting just 1650 tax credit, then something is wrong, and you will have to do tax returns for past years.

To double check, what are your tax credits and SRCOP on your payslip?

rainbowtrout · 04-08-2020 3:23pm

Teach30 wrote: »

Ha ha I have them but dont open them.
I’ve a bundle of revenue letters too but not opened either. Actually what do other people do with them? Should I bin them.

None of this was part of learning how to be a teacher..!

I appreciate everyone’s help.

I’m not worried about AVCs right now I’d prefer to get the basics right first and understand them before I move to all the pension stuff as at the moment I’m feeling overwhelmed with just this.

Again this is why I’ve never asked anyone else in the staffroom - I’m embarrassed that I’m clueless about it all and it’s easier not to ask then.

:eek::eek::eek::eek:

But everyone who works is an employee!!!

The longer you go without checking your pay, the harder it is to piece together your work history to check if you are entitled to be on a particular point, particular if you had subbing hours anywhere along the way.

Anyone will answer your question in the staffroom. Everyone has had to figure it out at some point along the way. If you don't know what you are earning you can never question if what you are earning is correct.

Teach30 · 04-08-2020 3:42pm

rainbowtrout wrote: »

:eek::eek::eek::eek:

But everyone who works is an employee!!!

The longer you go without checking your pay, the harder it is to piece together your work history to check if you are entitled to be on a particular point, particular if you had subbing hours anywhere along the way.

Anyone will answer your question in the staffroom. Everyone has had to figure it out at some point along the way. If you don't know what you are earning you can never question if what you are earning is correct.

I was semi taking the mick. I won’t lie I always assumed that the dept would get it right? Is that not their job. Seriously though for people like me it would be of great benefit if this was included in teacher training. I never though to question it.

Teaching was the first job I ever had and I genuinely assumed the payroll people would have to get it right.
As for asking in staffroom I’d be far too mortified, even here I still don’t understand the pension thing, where does the 80 number come from?

I really appreciate everyone helping me but I could do without the your so silly tone. I know I am and I’m trying to fix it. I don’t care if I’ve missed out on money And tax credits all along thats my own fault but I’m trying to amend things now. Thanks for trying to help me all the same

Teach30 · 04-08-2020 3:48pm

Geuze wrote: »

If this is correct, and you are getting just 1650 tax credit, then something is wrong, and you will have to do tax returns for past years.

To double check, what are your tax credits and SRCOP on your payslip?

Ok so on my payslip it says on one line
Tax credit 126.92 and cut off point is 1357.69 and on the built underneath it’s
Tax credit 1650 and cut off point is 17650.00

Tax return is foreign to me..

am_zarathustra · 04-08-2020 3:58pm

Ok from this I assume you are paid every 2 weeks so can you tell me what your gross pay is? I can work the increment you are on from that. Gross pay is what you get before tax

Then if you include your net pay I can roughly guess if the tax is right. You have 2 tax credits of 1650 and your cut off is wrong or for something else, not PAYE anyway. Also are you currently full time?

Teach30 · 04-08-2020 4:05pm

am_zarathustra wrote: »

Ok from this I assume you are paid every 2 weeks so can you tell me what your gross pay is? I can work the increment you are on from that. Gross pay is what you get before tax

Then if you include your net pay I can roughly guess if the tax is right. You have 2 tax credits of 1650 and your cut off is wrong or for something else, not PAYE anyway. Also are you currently full time?

Hi thanks yes I’m full time.
Total earnings is 2310.19 and yes paid fortnightly.
Net pay is 1472.47

rainbowtrout · 04-08-2020 4:10pm

Teach30 wrote: »

I was semi taking the mick. I won’t lie I always assumed that the dept would get it right? Is that not their job. Seriously though for people like me it would be of great benefit if this was included in teacher training. I never though to question it.

Teaching was the first job I ever had and I genuinely assumed the payroll people would have to get it right.
As for asking in staffroom I’d be far too mortified, even here I still don’t understand the pension thing, where does the 80 number come from?

I really appreciate everyone helping me but I could do without the your so silly tone. I know I am and I’m trying to fix it. I don’t care if I’ve missed out on money And tax credits all along thats my own fault but I’m trying to amend things now. Thanks for trying to help me all the same

They are human, they make mistakes, someone can type a date in wrong, choose the wrong option from a drop down list on a computer system. This is why you have to check to make sure it's correct and get it fixed if it isn't.

With regard to the highlighted bit above. You are an adult, and should be capable of looking after yourself and learning to read a payslip and ensuring you are paid correctly is one of those things. Anyone that starts off new in our staffroom asks around in the first few months for information on their payslip and who to contact if they have questions, it's about taking responsibility for yourself. There's no point just leaving it and saying 'I've no clue of maths lol'. If you left school at 16, and were stacking shelves in a supermarket, you would get a payslip and you would be checking it to see if you got paid for the correct number of hours and if you got paid the right amount for overtime.

My first payslip 19 years ago, I didn't know what the terms meant on it, and there wasn't widespread access to internet in 2001 so I couldn't just google it. I nipped into the principal to ask. She said she didn't want to look at what I was earning to give me some privacy, I just told her I wanted to know what the various deductions meant etc, and she told me, and that was that.

If my pay is out by €5, I'll be checking my payslip to see why. It's not about the €5, I want to know why it changed and if it's a mistake.

Teachers are due a pay rise of 2% on the 1st October. That will be applied to the common pay scale, not the allowances, so I can calculate what the new value of my point on the pay scale will be. I would also be expecting to see my pay rise slightly in my payslip in mid October as a result, and if it doesn't I'd be asking other people in my staffroom if theirs changed. If they haven't, I know it's a delay at payroll's end and I will check again in the next payslip at the end of October, if mine hasn't changed and everyone else's has (unlikely) then I would know to check with payroll.

And in terms of what I'd be expecting. A 2% payrise at the point on the scale where I am is about an extra €1200 annually. So across 26 pay days that's approximately €46. At least half of that will be gone on tax. So I can expect an increase in my pay in October of in and around €23 per fortnight. It won't be exactly that, but it won't be far off.

Reading a payslip does not require training at third level, and it's not the lecturers job to do that.

The 80 comes from the fact that your pension is calculated by you receiving one-eightieth of your salary for each year that you work. You work 30 years, you get 30 eightieths.

Teach30 · 04-08-2020 4:17pm

rainbowtrout wrote: »

They are human, they make mistakes, someone can type a date in wrong, choose the wrong option from a drop down list on a computer system. This is why you have to check to make sure it's correct and get it fixed if it isn't.

With regard to the highlighted bit above. You are an adult, and should be capable of looking after yourself and learning to read a payslip and ensuring you are paid correctly is one of those things. Anyone that starts off new in our staffroom asks around in the first few months for information on their payslip and who to contact if they have questions, it's about taking responsibility for yourself. There's no point just leaving it and saying 'I've no clue of maths lol'. If you left school at 16, and were stacking shelves in a supermarket, you would get a payslip and you would be checking it to see if you got paid for the correct number of hours and if you got paid the right amount for overtime.

My first payslip 19 years ago, I didn't know what the terms meant on it, and there wasn't widespread access to internet in 2001 so I couldn't just google it. I nipped into the principal to ask. She said she didn't want to look at what I was earning to give me some privacy, I just told her I wanted to know what the various deductions meant etc, and she told me, and that was that.

If my pay is out by €5, I'll be checking my payslip to see why. It's not about the €5, I want to know why it changed and if it's a mistake.

Teachers are due a pay rise of 2% on the 1st October. That will be applied to the common pay scale, not the allowances, so I can calculate what the new value of my point on the pay scale will be. I would also be expecting to see my pay rise slightly in my payslip in mid October as a result, and if it doesn't I'd be asking other people in my staffroom if theirs changed. If they haven't, I know it's a delay at payroll's end and I will check again in the next payslip at the end of October, if mine hasn't changed and everyone else's has (unlikely) then I would know to check with payroll.

And in terms of what I'd be expecting. A 2% payrise at the point on the scale where I am is about an extra €1200 annually. So across 26 pay days that's approximately €46. At least half of that will be gone on tax. So I can expect an increase in my pay in October of in and around €23 per fortnight. It won't be exactly that, but it won't be far off.

Reading a payslip does not require training at third level, and it's not the lecturers job to do that.

The 80 comes from the fact that your pension is calculated by you receiving one-eightieth of your salary for each year that you work. You work 30 years, you get 30 eightieths.

Ok well I assumed checking my bank balance was the same thing. I never questioned it.
I’ve never once heard anyone ask about payslips in the staffroom and I’ve been in a lot of staffrooms. I’ve certainly never been asked!
The NQT courses might cover it though if it’s not relevant to college.

I’ve written out the pension bit to help me with it so thanks for trying to explain.
With regards to checking If I’m out money well I don’t know how much I should be getting which is why I’m here!

rainbowtrout · 04-08-2020 4:23pm

Teach30 wrote: »

Ok well I assumed checking my bank balance was the same thing. I never questioned it.
I’ve never once heard anyone ask about payslips in the staffroom and I’ve been in a lot of staffrooms. I’ve certainly never been asked!
The NQT courses might cover it though if it’s not relevant to college.

I’ve written out the pension bit to help me with it so thanks for trying to explain.

The easiest way to look at the pension for now is to look at the top point on the pay scale. Add your degree and dip allowances to it. This is the max you can earn without having a post. If you work for 40 years divide this total by 2. That is your max pension value.

https://www.tui.ie/welcome-to-our-website/common-basic-scale-wef-1110.5776.html

Top point on the payscale is 64302. I'm assuming you have honours degree and honours dip. The allowances for those (further down that webpage) are 1236 and 4918.

Total potential pay is 70456.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

StackSteevens · 04-08-2020 4:34pm

Teach30 wrote: »

Ha ha I have them but dont open them.
I’ve a bundle of revenue letters too but not opened either. Actually what do other people do with them? Should I bin them.

None of this was part of learning how to be a teacher..!

I appreciate everyone’s help.

I’m not worried about AVCs right now I’d prefer to get the basics right first and understand them before I move to all the pension stuff as at the moment I’m feeling overwhelmed with just this.

Again this is why I’ve never asked anyone else in the staffroom - I’m embarrassed that I’m clueless about it all and it’s easier not to ask then.

So, do you even know what a P60 is?

If you saw one running down the road, would you run after it!

Millem · 04-08-2020 4:34pm

rainbowtrout wrote: »

The easiest way to look at the pension for now is to look at the top point on the pay scale. Add your degree and dip allowances to it. This is the max you can earn without having a post. If you work for 40 years divide this total by 2. That is your max pension value.

https://www.tui.ie/welcome-to-our-website/common-basic-scale-wef-1110.5776.html

Top point on the payscale is 64302. I'm assuming you have honours degree and honours dip. The allowances for those (further down that webpage) are 1236 and 4918.

Total potential pay is 70456.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

I thought the pension amount did not include the state pension?

Teach30 · 04-08-2020 4:37pm

rainbowtrout wrote: »

.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

Thanks for taking the time to type that out. I was way off the mark with my workings.

I’ve never though about Early retirement. I assume I keep going until 68. Maybe for another thread pros and cons of going earlier..
What age do most teachers retire at?

Geuze · 04-08-2020 4:38pm

Teach30 wrote: »

Teaching was the first job I ever had and I genuinely assumed the payroll people would have to get it right.
As for asking in staffroom I’d be far too mortified, even here I still don’t understand the pension thing, where does the 80 number come from?

I really appreciate everyone helping me but I could do without the your so silly tone. I know I am and I’m trying to fix it. I don’t care if I’ve missed out on money And tax credits all along thats my own fault but I’m trying to amend things now. Thanks for trying to help me all the same

Tax is your responsibility.

You must check your own tax credits and SRCOP.

The DES payroll do not check them.

The 1/80 is easy.

Think about it, the scheme is based on providing half final salary as a pension.

It is based on forty years.

So for each year you pay in, you accrue 1/80 of the benefits.

After forty years, you have 40/80 of salary as pension.

Teach30 · 04-08-2020 4:39pm

StackSteevens wrote: »

So, do you even know what a P60 is?

If you saw one running down the road, would you run after it!

I’d suggest a p45 for your helpfulness.

P60 - I know what it is I don’t know what to use it for.

If you’d care to explain do seeing as you know it all.

rainbowtrout · 04-08-2020 4:44pm

Millem wrote: »

I thought the pension amount did not include the state pension?

Pre 95 teachers it is not included, they pay D rate PRSI. Post 95 pay A rate PRSI so effectively it makes up part of the pension. If you finish on full service 60K and are entitled to pension of 30k, 18k of that comes from teaching pension and rest from the state. If you retire before 65 (or 67, 68 wherever we will be in the future) you can apply to get a payment in lieu of pension payment, which essentially amounts to the same thing.

rainbowtrout · 04-08-2020 4:48pm

Teach30 wrote: »

Thanks for taking the time to type that out. I was way off the mark with my workings.

I’ve never though about Early retirement. I assume I keep going until 68. Maybe for another thread pros and cons of going earlier..
What age do most teachers retire at?

The oldest person in my staffroom is 57ish. There are only 6 people (out of about 40) people 50 or over in my staffroom and that includes the Principal and DP, and one teacher who went into teaching late in life (40s).

Lots of teachers try and get out in their 50s. But teachers who started after 2004, and you are in this cohort, can retire in their 50s but they cannot draw down the pension until they reach 65, so if you wanted to go early you would have to have another source of income to bridge the gap.

Teachers who started before 2004 can go from the age of 55 onwards once they have 33 years done and their pension is paid out to them there and then. Last few years in my school has seen a number of teachers go in their mid 50s, they felt burned out and didn't want to do another 5 years. Can take a slightly smaller pension and work part time at something else or do grinds if they want to make up the shortfall.

Millem · 04-08-2020 4:48pm

rainbowtrout wrote: »

Pre 95 teachers it is not included, they pay D rate PRSI. Post 95 pay A rate PRSI so effectively it makes up part of the pension. If you finish on full service 60K and are entitled to pension of 30k, 18k of that comes from teaching pension and rest from the state. If you retire before 65 (or 67, 68 wherever we will be in the future) you can apply to get a payment in lieu of pension payment, which essentially amounts to the same thing.

Oh gosh I thought we got state pension on top

Financial advice for teachers

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