1. A Teacher’s Guide to Saving
Make the most of your savings and investments

2. Wesleyan for Teachers understands
that teaching is a way of life, not
just a job. We have expert financial
consultants who have years of
experience in helping teachers
with their financial planning. In this
guide we will explain how to manage
your money effectively to ensure you
make the most out of your savings.
2
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

3. Contents
4 Introduction
5
How often do teachers save?
6/11 Five steps to saving
6
Emergency fund
7
What are you saving for and when do you want it?
8/9 Saving for the long term
10 Think about how inflation affects your savings
11 Review your savings
12/13
14
15
Looking ahead to retirement
Key facts and stats
Checklist and useful
contact details
3
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

4. Introduction
We work with teachers every day both in schools and at home,
helping to plan their finances. So we know that many teachers
are thoughtful and careful savers and our research confirms
this. However, it also shows that over half of teachers believe
they have less understanding of savings and investments than
the general population.
In this guide we hope to show that many of you are on the right
path when it comes to managing your money and give you some
useful tips to help you make more out of your savings. We’ve also
included some findings from our research so that you can see
the attitude of others in your profession.
There are no clear indications that the economy is going to pick
up and you are likely to be feeling the squeeze on your pay
packet, as the current pay freeze combines with rising prices
and likely changes to your pension. So now is a good time to
review your savings habits and make yourself a clear plan if
you don’t already have one.
If you need help from financial experts who understand your
profession then please contact Wesleyan for Teachers. We are
part of Wesleyan Assurance Society, one of the UK’s leading
mutuals. We’ve been providing financial advice for over
170 years and have a proven investment track record.
If you want to know what some of your colleagues think about
us then we can tell you that 99% of teachers said ‘Wesleyan
makes them feel valued as a customer’ and 89% are likely to
recommend us to a colleague.
I hope you find this guide useful and interesting.
99%
of teachers said
Wesleyan makes them
feel valued as a customer
89%
of teachers would
recommend Wesleyan
to a colleague
Simon Rake
National Sales Manager, Wesleyan for Teachers
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

5. How often do teachers save?
Once you have cleared any outstanding loans, you should try and get into a habit of
saving regularly. Having money in reserve gives us choices – the choice of where to go
on holiday, where to live and ultimately when to retire.
On average, how much do teachers save every month?
48%
22%
15%
With so many pressures on your pay packet, setting yourself
a target or goal might help encourage you to save. If you can
picture that new house or see your children at university, then
you might be more inclined to save towards it.
Everyone has different financial commitments, but our research
has shown 40% of teachers manage to save every month or
every other month.
0
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How much you put away will depend on your personal
circumstances. Calculate your monthly outgoings and try to work
out how much you can afford to save without impacting too much
on your daily life. You could then set up a direct debit or standing
order to a suitable account so it’s all taken care of automatically.
Nearly half of all teachers who save every month put away
between £100 and £250. It won’t take long for this to build
up into a tidy sum for you to spend as you wish.
5
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

6. 1
As you move through your career
your savings will hopefully grow and
it’s important to consider how you
use that money most effectively.
Here we take you through a
step-by-step guide to building
a balanced savings portfolio.
Five steps to saving
Emergency Fund
We asked teachers what their first priority was when it came to saving. Just over a third
said to have money in case of an emergency.
Teachers’ savings priorities
11%
No specific priority
100
10
90
35%
8%
To have money in case
of an emergency
80
20
70
Saving for your retirement
30
22%
To be able to pass wealth
onto your family
40
60
50
When you start saving, it’s good financial planning to build up
an emergency fund. This is essentially a stash of cash that will
keep you going in the short term if you are unable to earn for
any reason, or face unexpected expenditure such as repairs
to your home or car.
24%
To save for a particular
item or goal
The amount you save will depend on your lifestyle and
circumstances, but we usually recommend the equivalent
of three months’ income, after tax. This money should be kept
in an account that is easily accessible as you may need it at
short notice.
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

7. 2
Five steps to saving
What are you saving for
and when do you want it?
As you go through life you will have different savings goals. It’s important to consider
whether you are saving for the short or the long term as this should help you decide
where to keep your money.
Why else are teachers saving?
Last will
& testament
1
3
&
2
37.5%
27.5%
23%
17%
To purchase
a property
Home expansion/
improvements
Children/grandchildren
To pass on to
family members
Open
8%
7%
4.5%
3%
To buy luxury items
To invest in/start-up/
buy a business
Pursue other ambitions
eg: sabattical/voluntary work
Weddings
Saving to buy a new car could be a relatively short term goal,
whereas putting money aside to pass on to your family or
to pursue other interests later in your life will be a longer
term ambition.
a normal savings account but the key benefit is that you don’t
have to pay income or capital gains tax on the interest or on your
money when you come to withdraw it. That’s why there is a limit
on how much you can save into an ISA each year.
If you are saving for the short term, you should make use of
your cash Individual Savings Account (ISA) allowance, which
is currently £5,640 for the 2012/13 financial year. An ISA is like
It’s important to review the interest rate on your ISA as many
providers draw customers in with a headline-grabbing rate
which diminishes over time.
7
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

8. 3
Five steps to saving
Saving for the longer term
When you’re saving for the longer term, retirement for example, you might be prepared
to take a bit more risk with your money and studies have shown that investing in shares
offers a better return than cash over the long term* but also brings more risk.
Do you understand the term ‘attitude to risk’ when it comes to money?
71.5%
No
28.5%
Yes
You may have heard the term “attitude to risk” used in relation
to investments and it’s key to helping you decide where to place
your money. Risk and reward often go hand in hand so the more
risk you take the better the potential returns, but you could lose
money along the way. Cautious investors accept they will see a
lower but consistent return on their money.
We know that most teachers have a low risk attitude and are
cautious investors, and would be uncomfortable investing
directly into the stock market. However there are other
options available that give you access to shares but in a
more managed way.
* Over a ten year period there is a 90% probability of shares outperforming cash: Barclays Capital Equity Gilt Study 2011.
8
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

9. g to take?
How much risk are you willin
38.5%
27%
27%
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With profits ISAs, for example, invest in the stock market but are
more suitable for cautious investors as they offer a ‘smoothing’
process that aims to reduce the effect of short-term fluctuations
in the market to deliver more consistent growth. As with cash
ISAs your money will grow free of income and capital gains tax.
How much you can invest is currently limited to £11,280
for 2012/13 if you don’t use your full cash ISA allowance,
or £5,640 if you do.
Another option might be to invest in a fund where people pool
their money together to access a wide range of investments.
This approach means you can spread your money more widely,
reducing the impact of loss from a single investment. The
advantage of funds is that an expert Fund Manager will normally
research and choose the best investments to buy and sell.
Quick tip:
The key thing to consider when buying a
with profits ISA is the financial strength of the
provider. A company’s size is no indication of
financial strength and smaller mutuals can
fare much better than the insurance giants
in this regard.
When putting your money into any shares-based investment,
you should be prepared to leave it in for at least five years.
9
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

10. 4
Five steps to saving
Think about how inflation
affects your savings
Inflation is still outstripping the Bank of England’s record low interest rates. This is not
good news for savers as, put simply, inflation can eat away at the value of your money
and reduce its buying power.
£10,000 will be worth...
£9,786
£8,974
£8,053
1 year from now
5 years from now
10 years from now
For example, if you have £10,000 in an account paying interest
at the Bank of England base rate of 0.5%, in 12 months this will
be worth the equivalent of £9,786 in today’s value; in five years
£8,974 and in ten years’ time, £8,053.*
You should avoid keeping large sums of money in a bank or
building society account but look at options which offer growth
that keeps pace with or exceeds inflation.
To see how inflation could impact on your savings use the online calculator at www.wesleyan.co.uk/investments
*Figures based on inflation remaining at the 2.7% at time of publication, November 2012.
10
For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

11. 5
Five steps to saving
Review your savings
Just as saving regularly is a good habit to get into, so is carrying out a regular review.
How often do teachers typically review their savings and investments?
12.5%
No regular pattern
11%
Once a month
13.5%
Every couple of years
28%
Every couple of months
35%
Once a year
A third of teachers review their savings and investments once
a year, with just over a quarter checking them every couple of
months. Again, this is good financial practice.
There is no hard and fast rule about when you should carry out
a review, but you might decide to do it every summer before the
school year begins or over Easter, which often falls around the
time of the new financial year on 6 April. What you’re looking for
is that interest rates are still competitive and that your money is
working as hard as you are.
Quick tip:
As you build up your savings and investments
portfolio, try to keep your money in a range of
assets so that if one type performs badly another
may perform well during the same period.
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

12. Looking ahead to retirement
More than a third of teachers say enjoying their wealth in retirement is a priority and we
know that this is the ultimate savings goal for many of you.
Do you think the Teachers Pension Scheme will provide
you with enough to live on in retirement?
72%
You may already be enrolled in the Teachers Pension Scheme
(TPS), although you will probably be aware that there are likely
to be changes to this and other public sector pension schemes
in the coming years. The final legislation hasn’t been passed yet,
but it is fair to assume you will be required to pay more, to earn a
lower pension, and have to retire later.
You may therefore find yourself with a shortfall in your pension
income or want to retire earlier. The key thing is to understand
what your position is likely to be.
28%
Quick tip:
The earlier you start planning, the better
prepared you will be to enjoy your retirement
and by speaking to a Financial Consultant who
understands the teaching profession and the
TPS you will be able to put in place plans to suit
your needs.
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

13. In the years leading up to your retirement there are some important things to take into
account to ensure you will be comfortable once you stop working.
• Work out when you would like to retire and
what level of income you will need. This will
depend on the lifestyle you intend to have.
Everyone is different. You may want to
travel the world or be happy at home.
• Your TPS and state pension income may
not be enough to meet your needs, so
calculate any shortfall between this and
what you would like your ideal retirement
income to be. You can get an indication
of how much your pension will be worth
by using the calculator on the TPS website
(See below). 72% of teachers don’t think
the TPS will provide them with enough
to live on in retirement with 62% planning
to supplement their pension.**
• If you’re close to retirement, you may be
able to make up any deficit through your
tax free lump sum or additional voluntary
contributions to your pension. If you’re still
a long way off, think about taking out an
additional personal pension or investing in
other tax efficient products, such as ISAs
or other long term investments.
To access your Teachers Pension Scheme statements, check your service history and pay, and find out
how much your retirement income could be, visit the website at: www.teacherspensions.co.uk.
For more information about your state pension and to get a forecast of how much it will be worth
visit www.direct.gov.uk/pensions.
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

14. And finally, here are interesting facts for you to think about
as you plan your savings.
23
years
£9,676
The average pension of
a female teacher in 2010/11
The average career length
of a teacher
Armed forces – 10yrs
NHS – 11yrs
Civil service – 13yrs
Judges – 16yrs
Firefighters – 18yrs
Police – 23yrs
£14,701
Which of the following
financial investment
products would teachers
say they have a good
understanding of?
45%
The average pension of
a male teacher in 2010/11
(Source: Independent Public Service Pensions
Commission Final Report, March 2011)
Source: Teachers’ Pensions
Do teachers think their profession
is more or less savvy with savings
and investments compared to the
general population?
Do teachers think they will achieve
all their financial goals during their
working life?
Yes 19%
ISAs
33.5%
17%
More savvy
54.5%
Less savvy
Unit Trusts
No 55.5%
23.5%
?
Not sure 25.5%
28.5%
Don’t know
Pensions
If you were to recieve a large windfall which of these
luxuries would appeal to you most?
16.5%
24.5%
26%
21.5%
4.5%
4.5%
1.5%
0.5%
16%
0.5%
12%
Other
Setting up your own business
An expensive car
Holiday
Art/Antiquities
Investing it for yourself/family
A yacht
Property abroad
Property in the UK
Investment Bonds
None of these
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

15. Checklist
Having learnt more about savings and investments here’s a useful checklist
to help you stay on track.
Clear any outstanding loans
Set up a direct debit to your savings accounts
to help you save regularly
Build up an emergency fund
Utilise your full ISA allowance
Consider longer term savings options
Review your savings portfolio at least once a year
Make sure your pension savings are on track
For more information about the services provided
by Wesleyan for Teachers visit the website at
www.wesleyan.co.uk/teachers or call 0800 316 7035.
Also look out for Wesleyan for Teachers at education
events around the country throughout the year.
(All research carried out by OnePoll on behalf of Wesleyan Assurance Society in Dec 2011, except** on page 13 from June 2011)
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For more information visit www.wesleyanforteachers.co.uk or call 0800 316 7035 quoting reference 60707

16. For all your financial needs:
•
•
•
•
Savings and Investments
Retirement Planning
Life and Income Protection
Mortgages and Insurance
Please call: 0800 316 7035 quoting reference 60707
Or visit: www.wesleyanforteachers.co.uk
Head Office
Wesleyan Assurance Society
Colmore Circus
Birmingham B4 6AR
Advice is provided by Wesleyan Financial Services Ltd through its brand names including Wesleyan Medical Sickness,
Wesleyan for Teachers and Wesleyan for Lawyers.
Wesleyan Financial Services Ltd is authorised and regulated by the Financial Services Authority. Wesleyan Financial
Services Ltd is wholly owned by Wesleyan Assurance Society. Incorporated by Private Act of Parliament (No. ZC145).
Fax: 0121 200 2971. Telephone calls may be recorded for monitoring and training purposes.
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