Pensions for Expat Teachers (Ho Chi Minh City)
Pensions advice for teachers in Asia
My wife is a teacher and we have just relocated to Vietnam from the UK so I fully understand the concerns that arise when you leave a well-paid job with a state pension in the UK to work overseas. Indeed, many of my wife’s colleagues back home were shocked that she would consider giving up her UK teacher’s pension. However, we carefully weighed up the pros and cons of uprooting ourselves and experiencing life in another country and decided that for us the advantages outweighed the potential downsides.
I am a financial adviser with an eye firmly on our financial future so this wasn’t a decision that we came to lightly but now that we are here and loving the culture, the friendly people and the food, I feel that we made the right decision. However, it does mean that we need to be more proactive about financial planning.
It’s worth pointing out that state pensions are not what they used to be. Changes to the Teachers State Pension in Protected content , according to the National Union of Teachers ‘make teachers pay more, work longer and get less in retirement.’ In order to qualify for the full pension, teachers under the age of 37 as at April Protected content , will have to work until the age of 68 – at least (this could yet rise further). Yikes! Most I know are ready to stop way before that – keeping up with young people can be hard work in your fifties and sixties. We decided that choosing our life path based on these pension arrangements was folly, and I would advise anyone against relying solely on a state pension to fund retirement.
It is rare for foreign teachers in Asia to have pension provision so my wife no longer pays directly into a scheme. That means it is up to her to make her own arrangements to save for retirement. On the plus side, that gives her flexibility to invest when and how it suits her. With the cost of living in Vietnam relatively low, disposable income can be quite high for teachers and this presents an excellent opportunity to amass a tidy nest egg.
If you’re a teacher here, it is essential you set up your own pension arrangements, however old you are. In all the excitement of a new life abroad this is something that can slip down the priority list and often gets neglected but don’t relegate financial planning to the bottom of the list for too long. Every pay packet is a chance to get that bit nearer to your target pension pot and one step closer to stopping work! The beauty of controlling your own pension is that it gives you choices – shrewd financial planning for example, could give you the option of stopping work well before you reach 68.
Slow and steady wins the race when it comes to pension saving and a key element is compounding. That’s why you really need to start saving as early on in life as you can. I’ve seen many young people put off saving because retirement seems way to distant and far too many forty somethings who are panicking because they have done exactly that and suddenly realise that retirement is not that far off and they have no provision.
I know that pensions and financial planning can seem a little daunting, especially if you have moved jobs several times and have little pension pots in several places, but it really doesn’t need to be difficult. With the help of a professional you can set some realistic retirement planning goals and work out whether amalgamating different pension pools is a good idea.
If you are a teacher working in Vietnam and would like to get some pension arrangements in place, why not give me a shout? I can help you get your finances in order so that pension saving becomes just a regular part of your monthly expenditure. And – bonus - the initial consultation won’t cost you anything. To set up a meeting, email me at Protected content