Technologically and linguistically adventurous EFL teacher, trainer, writer and manager

EFL pension plan

Something I’ve wondered for while is what EFL teachers do when they retire. And my conclusion has pretty much always been that they don’t, or can’t.

Photo taken from http://flickr.com/eltpics by Jeffrey Doonan, used under a CC Attribution Non-Commercial license, http://creativecommons.org/licenses/by-nc/3.0/

Photo taken from http://flickr.com/eltpics by Jeffrey Doonan, used under a CC Attribution Non-Commercial license, http://creativecommons.org/licenses/by-nc/3.0/

At the grand old age of 28, I feel like I’ll never be able to retire for at least three reasons:

  • the government keeps pushing the retirement age higher and higher, and I think it’ll be abolished long before I ever reach 65…70…75…
  • short of writing a series of bestselling coursebooks or methodology books à la Messrs Harmer and Thornbury, the ELT profession will never pay me enough money to be able to afford to retire
  • I am a workaholic (No! Really?) and my job is a huge part of who I am. My grandad is still working (by choice) at the age of 77 in a profession he loves, and I would love to be in that position.

I realise that this may change, but they do say you should start thinking about your retirement plans early. In 10 years of working, I have only had two which could contribute to my UK state pension, if indeed I’m living in the UK when/if I retire. I certainly can’t afford to put money into a private pension plan, and I wouldn’t trust it to still exist in 50 years even if I could.

I also know that retirement is not really a part of most EFL teachers’ mindsets. But maybe we should be talking about it. What do you think?

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Comments on: "EFL pension plan" (23)

  1. Len Holder said:

    I have not been as efficient as I should have been in planning pensions. Each time my career changed direction, I used earlier pension contributions to fund the next step.

    I think it IS worth thinking about pensions now. We should talk.

    An old chestnut!! Learning to drive might be a good investment – it does not cost too much!

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  2. Yes…will someone please tell me what the solution to this one is.

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  3. I do think about retirement, but then get nervous and shaky and change my thoughts. It’s a very difficult industry to be in for any type of security, not the least of which is during our golden years when we should be reaping the benefits of our hard work. Luckily here, at any job that isn’t under the table, we have to contribute to the government controlled pension plans, but even still, their returns aren’t enough to survive, but at least it’s something. I’m trying to be more conscientious when it comes to putting money away, but let’s face it, I’m not a strong saver and neither is my partner. Retirement is a big worry.

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    • Simon’s reply is very helpful in this regard I think. I hope that you (we) manage to find a solution that will keep us secure and happy.
      Good luck!
      Sandy

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  4. Simon Greenall said:

    Hi Sandy, as someone not too far off pensionable age(seven or eight years, but …) I wanted to write and say you’re extremely far-sighted to be thinking about this. You’re probably right about the UK state pension but I’m not sure you shouldn’t trust pension plans to pay up in 35 years time. Actually, it’s the only thing we can do, and while a complete breakdown of the financial markets is possible, there would be so many other related and more significant issues that you could probably put this concern aside for the moment.

    (Also, please be careful about what you think course book and methodologywriters earn. As a career move it’s far more risky than even the financial markets at present!)

    Here’s what I did. When I turned freelance i was the same age as you, and I needed an accountant, who gave me good advice. He reckoned that I didn’t to invest in a pension immediately. Although starting to make private pension contributions early is always a good thing, he understood that I probably needed my (rather small) income for other things. In fact, it was only when i turned forty, after I’d got a mortgage, a lifetime partner and two small children, that he thought I’d better start thinking about pensions contributions.

    Remember, any contributions you make towards pensions are deducted from your UK tax liabilities. But what if you’re not living and earning in the UK (eg Sevastopol or Brno)? It’s still worth looking into making UK contributions, because they may end up being part of double taxation agreements between the UK and Ukraine, (Czech Republic certainly).

    I think if it was in your position, I’d certainly be looking at ISAs, which will look after any savings you may have in an equally beneficial way (no tax deducted), and yes, I’d do this under the UK fiscal regime if you (and Sophia?) are UK citizens.

    That lump sum could then go into a pension scheme when you’re ready.

    My son is two years younger than you, not in ELT, and has no money to spare. It’s not just ELT as a profession where you won’t be able to retire.

    But I do think it’s very thoughtful to be thinking about this now. A lot of my contemporaries didnt or weren’t able to do pension planning, and they need to keep on working.

    One course of action is to talk to a financial adviser. They cost money although they usually make much more money for you. In fact, I can put you in touch with my own, who is extremely straightforward and honest and pleasant, and won’t take your business without be quite sure you can afford it.the alternative is to talk to your bank, and I don’t know how you feel about that. But either way. They’ll suggest small pension contributions or ISAs for any spare money you may have. And if you don’t have any at the moment, well, maybe you will in ten years time, when you should think about all this seriously. In the meantime, enjoy yourself while you don’t have obligations and responsibilities!

    Hope this is useful. It’s probably worth another chat up the Zugspitze 🙂

    When are you off to Sevastopol? Enjoy!

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    • Dear Simon,
      Thank you so much for such a comprehensive reply! That’s exactly the kind of advice I was hoping for when I wrote this post. Lizzie Pinard also suggested an ISA, which is not something I had considered before, but definitely will now.
      I know that coursebook writing is not the financial solution that some people consider it to be, but perhaps by sheer number of titles, it can help! 😉
      I’m off to Sevastopol in September once all of the paperwork is sorted. And I’d definitely be interested in another chat, although we’ll be hard-pushed to top the Zugspitze, in every sense of the expression.
      Thank you again!
      Sandy

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  5. I worked (for a VERY short time, and it didn’t end well – but that’s another story :-)) for someone who ran his own school. In the (Northern Hemisphere) winter he moved to his ranch in Mexico, which was, in effect, his ‘pension pot’).

    b

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  6. PS – I’d guess he was in his sixties. I don’t think he’d bought that place when he was 28!

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    • That’s my pension plan in the back of my head – run my own wildly successful school that earns me a lot of money 😉 But I know that takes a lot of work too!

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  7. It’s true that I’m not a British teacher, but I send you all, through Sandy’s post, my heartfelt call to start saving something, whatever you can, regularly, NOW and not to wait a moment longer. Small amounts add up to more when you start young. One never knows what the future will hold and everything counts.
    I personally, teach in a national school system and will get a pension. But my husband has been self employed for years so we are very familiar with the need to look out for the future yourself.

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    • Thank you for that advice Naomi. It’s something I want to do, but every time I get any savings behind me I move countries and it seems to wipe them all out (not that I would change my lifestyle for that reason). I feel like I’ll be staying in Ukraine for a while though, so hopefully that pattern will stop after this move.

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  8. I received a statement notice recently informing me that my annual teachers pension would currently be £1400-odd pa. And I’m sure I’ve got a few more years contributions into a pension scheme than you have. I’d assume that my state pension isn’t much larger at the moment.

    I’d second (third?) the suggestions about ISAs. I’ve been lucky in that I haven’t had too financial burdens over the past few years, so I’ve been putting a part of my monthly salary into a Stocks and Shares ISA with my bank. The interest isn’t anything huge, but the fact of making regular contributions means that it has grown to a small but not insignificant amount. Hopefully it will do when I need to firm up pensions, buy a house, etc.

    Good luck with the move to Sevastopol 🙂

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    • Thanks for that Mike – £1400 really doesn’t sound like a lot, but as you say, it’s more than mine! I think I’ll be setting up an ISA within the next year – it’s something I’ve thought about before, and I know that little and often does make a difference.

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  9. Good questions Sandy. Yes, it would be great to be still working in our 70s.. by choice and out of love of what we do…but without the financial pressure of ‘having’ to, and therefore not full time. I think that by the time we retire we’ll have/need a range of active and passive income sources from state pension to private, income from investments such as rental income from property, or – as you’ve mention regarding authors – IP related income. Even just putting aside 100 a month now will add up to a lot in 30 years. Simon’s comment is very helpful and well thought, but then again, when aren’t they?

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    • Agreed! And after all the help I’ve had today I’ve just set up an ISA. Only £10 in it at the moment, but who knows how much that £10 will be worth in 40-50 years 😉

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  10. A very worthwhile read, Sandy, and the same to all the commenters too.

    I’m in two of the situations mentioned above: I’m trying to make double state-pension contributions – one obligatorily (is that a word?) here in Spain, and one optional UK contribution to top up the years I missed working overseas.

    Also I and my partner are trying to live off our own school. We’re just getting to the end of our first financial year in which the school is our only source of income. So far, touch wood, we’ve survived.

    Sadly whatever options you choose are gambles: Will a state pension be worth anything way on down the line, and how old will you be when you qualify anyway? Private pensions – I’ve heard – don’t render well unless you live to a very ripe old age.

    Running your own school can go any way financially, as you can imagine, although the attractions are obvious enough.

    Hope there are more comments here. This is a subject that deserves much more attention and research.

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  11. […] Something I've wondered for while is what EFL teachers do when they retire. And my conclusion has pretty much always been that they don't, or can't. At the grand old age of 28, I feel like I'll nev…  […]

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  12. maria chiquita said:

    I’m just confused about one thing. You say you’re 28 and have worked for 10 years. You didn’t start working as an EFL teacher at the age of 18, did you? I’m 30 and by this time I could have worked a maximum of 7 years. Can you teach EFL in UK or anywhere else without having an MA in English?

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    • I started working as an EFL teacher when I was 21 during my uni year abroad, then full-time from 25. I’ve always worked in private language schools, where you don’t normally need a Masters.
      However, since 16 I’ve had some form of job at all times, and although some were part-time, many were full-time.
      Does that answer your questions Maria?
      Sandy

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  13. This has been an ongoing issue I’ve always pondered, and it is a problem. In all honesty, feel free to show me ANYONE who runs a wildly successful school (pedagogically and with the high enrollment numbers) who is very well off financially, after all expenses are accounted. Usually you have to keep reinvesting your profits (the building, the staff, the programs) in order to have a successful school with a quality reputation. That’s par for course in the private sector. I’m afraid that ‘well-off’ and ‘rich’ to be an oxymoron for the ESL/EFL industry. I’ve long wondered if IHWO headquarters (in London), who wants to keep their teachers globally within the IH system, has ever considered doing anything about a retirement fund issue…and what would you do for the teachers who weren’t of a UK nationality?

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  14. […] Though quite a short post, Sandy’s concern about what ELT educators do when they retire provokes a hearty discussion in the comments section from many of us struggling in the same boat. It’s a topic I’ve never seen directly discussed so openly on a blog, but one which we all know is a huge worry in our industry of low wages and insecure contracts. I say well unite, open a massive joint investment account to contribute to and share it when the time comes. […]

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