British Teachers As Millionaires

When I met a group of Singapore-based teachers at United World College on Monday, I mentioned that if a teacher, without an upcoming pension, wanted to generate income of £40,000 a year as a retiree, then they’d likely need an investment portfolio amounting to roughly £1 million.

It’s widely accepted that a maximum withdrawal rate for investments is 4% per year, so selling 4% of a £1 million investment portfolio would provide £40,000 in “income.” And over time, this conservative withdrawal rate should allow the retiree to increase their income over time, as they allot for the increases in the cost of living.

But a question remains: what are international teachers giving up, financially, when they teach overseas?

Recently, in The Guardian,  Phillip Inman suggests that the average UK based teacher will be a millionaire when they retire, thanks to their pensions:

“A teacher on £35,000 will qualify for a £17,000 a year pension with top-ups that can add another £3,000-£4,000 a year. A £20,000-a-year final salary pension with all the bells and whistles would cost between £700,000 and £800,000 to provide.”

Mr. Inman suggests that the teachers’ pension plan would have at least £700,000 “invested” to provide a “£20,000-a-year final salary pension with all the bells and whistles”

When we add in those bells and whistles (whatever they may be) you can see that his figures are very close to the 4% withdrawal rate that I mentioned for teachers without pensions.

If the bells and whistles he refers to have a currency value of £8000, then we’re looking at total compensation of £28,000, including benefits, which is exactly 4% of £700,000. When coupled with a mortgage-free home, it will make the average UK-based teacher, technically, a millionaire. And if we start considering UK-based teaching couples, you can double that figure.

Expatriate teachers need to look at income generators to replace this cash flow: rental property income and/or a large retirement portfolio.

No doubt, many expatriate teachers can easily exceed the financial assets (upon retirement) of the average UK, Canadian, Australian or U.S. based teacher—even when including the generous pensions they’ll be missing.

But to do so, they’ll have to plan. It won’t happen by accident.


Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

You may also like...

5 Responses

  1. Mike says:

    Hey Andrew,

    So, how was your presentation received? Yes, a lot of people are basing their decisions for retirement on taking advantage of currency ratios. It makes sense in a lot of cases.

    Have a great weekend. Mike

    • Cheers Mike,

      I think the part about how much money they should save was a bit of an eye-opener. But I do think it was well-received. You are right when you say that very few people think about this kind of thing. And it's not really their fault. If we're not taught this kind of thing at school (or wherever) then how are we going to know?

  2. Steve waugh says:

    These concept look awesome. Expatriate teachers need to look at income generators to replace this cash flow: rental property income and/or a large retirement portfolio. I think the part about how much money they should save was a bit of an eye-opener. Thanks!

  3. Yes Steve,

    The pensions that overseas teachers give up (by moving overseas) are worth a tremendous amount of money. And to replace that future income, we need to save and invest very intelligently.

  4. Mark oneil says:

    Hi Andrew,

    big fan of your book.

    Im an expat teacher from the uk based in KL(By the way I think malaysian food is great!).

    Been looking into different funds and etfs from a uk perspective. Can i ask what sort of portfolios/funds your uk friends have? Obviously every country is different but did your friends find anything i need to consider specifically to the uk?



Leave a Reply to Andrew Hallam Cancel reply

For your privacy we strongly recommend you do not use your full real name. While your email address will not be published, it may reveal your photo or a recognizable image if it is associated with It is strongly suggested you do not use a corporate or ISP email address. Before your comment is published you will receive an email asking you to confirm your email address. Select "Notify me of follow-up comments via email" to receive notifications of replies and be able to adjust your subscription. Published comments will not be deleted.

By clicking "Post Comment" you confirm you have read and agree to the conditions on the Legal Page; including the Privacy Policy, the Cookie Policy, and the Comments Policy.  We reserve the right to not publish comments that do not meet guidelines.

Do NOT follow this link or you will be banned from the site!