A guide to the Teachers’ Pension Scheme

Helping you understand the scheme

What is the Teachers’ Pension Scheme?

The Teachers’ Pension Scheme (TPS) is a ‘defined benefits’ pension scheme for teachers between the ages of 16 and 75. A defined benefits pension offers you a guaranteed income in retirement, as opposed to a defined contribution scheme, where your income is based on the performance of your pension fund with no guarantees.

You pay into the scheme through a monthly contribution taken from your salary and topped up by your employer.

In return for the money you put in, you’ll receive an index-linked, government-backed annual pension for your retirement (index-linked means it’s protected from increases in the cost of living). As long as you’re in eligible employment, you can take your pension with you throughout your teaching career, wherever the job may take you.

For teachers in Scotland, you’ll most likely be part of the Scottish Teachers’ Pension Scheme 2015, or the Scottish Teachers Superannuation Scheme (STSS). These work in a very similar way to the Teachers’ Pension Scheme for teachers across England and Wales.

How does it work?

As part of the Teachers’ Pension Scheme, you’ll fall into one of four groups, which will determine whether your eventual pension will be based on your final average salary or your career average earnings.

Your average salary is either the average of the best three consecutive years in the last ten years or the salary you received in the last year of employment before retirement.

You need to know which section of the scheme you’re in to determine when you can claim your pension benefits, and what type of benefits you’ll receive. This can be a bit tricky to understand.

What type of member am I?

If you joined (or join) the scheme on or after 1st April 2015, you’ll be classed as a ‘new’ career average member. If you joined before 1st April 2015, you’ll be a ‘protected’, ‘tapered’ or ‘transition’ member, depending on how far you were from the Normal Pension Age (NPA) on the 31st March 2012.

Protected members

If you were an active member of the scheme before 1st April 2012 and were within 10 years of the normal pension age (NPA) on 1st April 2012, you’ll remain in the final salary arrangement.

As long as you don’t have a career break of more than five years, you’ll stay in this arrangement until you take your full pension entitlement. If you leave your job before retirement, you can leave your benefits in the scheme and collect them at your pension age.

Tapered members

If you became an active member of the scheme before 1st April 2012 and were within 10 to 13 years and 5 months of the NPA on that date, you’ll remain in final salary for a tapered period of time.

At the end of the tapered period, you’ll move into the career average arrangement – this is your transition date. To find out your transition date, visit the Teachers’ Pension website.

You’ll keep your protection until:

You have a continuous break in service of more than 5 years
You take your pension benefits (other than phased benefits, which are the benefits you can take when choosing to work in a reduced capacity)

Transition members

If you’re an active member but were more than 13 years 5 months away from your NPA on 31st March 2012, you will have entered the career average scheme on 1st April 2015.

The McCloud Judgement

In 2015 most of the public sector schemes including the TPS were reformed and a 2015 CARE scheme was introduced. Members were automatically moved to the new scheme on 1 April 2015 unless they had full or tapered transitional protection. These protections meant that those closest to retirement wouldn’t move scheme or would move later, between April 2015 and March 2022.

In December 2018, the Court of Appeal ruled that these protections discriminated against younger members of the Judicial and Firefighters schemes. In July 2019, the Government accepted that the ruling applied to all the reformed public sector schemes. Changes are currently taking place to remove this discrimination.

Who this affects

These changes will affect your membership if:

You were a member on 31st March 2012 and on or after 1st April 2015.
You left the Scheme after 31st March 2012 but returned within 5 years.

This includes members who have received benefits since 2015.

On the 1 April 2022 the first steps to introduce the McCloud changes were introduced, these changes meant that:

All affected members were returned to their legacy scheme, either the 95 or 08 section, for the remedy period.
All affected members still contributing to the scheme were moved to the reformed scheme; the 2015 scheme.

When members take benefits, they will be asked which pension scheme they wish to receive benefits from for the period between 1st April 2015 and 31st March 2022 (known as the remedy period).

When this will take place

Public sector schemes have until 1 October 2023 to implement the changes and update their administration systems. Therefore, if you've already retired or you're due to retire before 1st October 2023, you'll receive a letter from Teachers’ Pensions asking you to make your choice retrospectively.

These changes have removed the member types discussed previously but the change will not show on statements or member records until the scheme have their administration systems in place. Members previously protected will have moved to the 2015 scheme on 1 April 2022 and this will show on any pension figures provided.

For now, there's nothing you need to do, but if you'd like support on the McCloud Judgement, you may want to seek retirement advice from Wesleyan Financial Services.

How much do I contribute to my teachers’ pension?

You’ll pay a percentage of your gross salary into your pension every month. Your employer will also contribute to your pension.

Here’s how much you’ll pay in, whether you’re a full-time or part-time member. Please note these ranges and rates are subject to change in future.

Contribution rates for the Teachers’ Pension Scheme (England and Wales)

Annual Salary Rate for the Eligible Employment from 1 April 2023	Member contribution rate	Employer's contribution
£0 - £32,135.99	7.4%	23.68%
£32,136 to £43,259.99	8.6%	23.68%
£43,260 to £51,292.99	9.6%	23.68%
£51,293 to £67,979.99	10.2%	23.68%
£67,980 to £92,697.99	11.3%	23.68%
£92,698 and above	11.7%	23.68%

Contribution rates for the Scottish Teachers’ Superannuation Scheme (STSS) and Scottish Teachers’ Pension Scheme 2015 (STPS 2015)

Actual pensionable pay for the eligible employment for 2023/2024	Your contribution	Employer’s contribution
£0 - £32,133	7.2%	23%
£32,134 - £43,257	8.7%	23%
£43,258 - £51,291	9.7%	23%
£51,292 - £67,975	10.4%	23%
£67,976 - £92,693	11.5%	23%
£92,694 and above	11.9%	23%

How much pension do teachers get?

To get an estimate of what your final pension value could be, you can use the official calculator by Teachers Pensions. Bear in mind that the Teachers’ Pension Calculator doesn’t currently reflect the latest changes being introduced due to transitional protection.

If you’d like to know how your pension value is calculated depending on the scheme you’re in, you can read more below.

How is the Teachers’ Pension calculated?

Career average scheme

As part of the career average arrangement, your pension benefits will be based on the amount you earn across your teaching career. Each year, 1/57th of your salary will be put into a pot which is then indexed annually by Consumer Price Index (CPI) plus 1.6%. The CPI provides a measure for rising living costs to make sure your pension isn’t losing any real-life value.

When you reach retirement, the value of each year’s pension pot will be added together to calculate the annual pension you’ll receive.

Let’s say your earnings for 1st April 2019 to 31st March 2020 were £25,000, meaning your pension for that year is £25,000 x 1/57th = £438.60. Once indexation is added (at 4% for example), you’ll have an extra £17.54, meaning you’ll have £456.14 at the start of next year.

If your salary increases to £30,000 in the following year, you’ll earn a pension of £30,000 x 1/57th = £526.32. Your total pension pot for those two years will be £982.46. Indexation will then be added to this new total.

Final salary scheme

The final salary arrangement is calculated against your Normal Pension Age (NPA). If you joined the Teachers’ Pension Scheme before 1st January 2007, your NPA is 60. If you became a member on or after 1st January 2007, your NPA is 65. If you joined after 1st April 2015, and are therefore part of the career average arrangement, your NPA is the State Pension Age or 65, whichever is higher.

As a pre-2007 member, your benefits are made up of an annual pension and a lump sum. You can calculate your pension by multiplying your years of service by your average salary, then dividing by 80. You’ll also receive a lump sum equal to three times your pension. You can also convert part of your pension into a lump sum if you wish.

As a post-2007 member, you’ll receive a pension calculated by multiplying your years of service by your average salary, then dividing by 60. You don’t automatically get a lump sum; however, you can convert part of your pension into a lump sum. This will in turn, impact your annual pension.

If you’ve had a break in service, the Teachers’ Pension Board will make a hypothetical calculation. You can learn more about this here.

Let’s say you’ve been a member of the Teachers’ Pension Scheme since 2000, have been employed for 20 years, and your average salary at retirement will be £35,000.

As you’re part of the final salary arrangement, you’d calculate your pension by multiplying your years of service (20) by your average salary (35,000), then dividing by 80. Therefore, you’d receive £8,750 per annum.

Collecting your pension

As well as an annual income for the rest of your life, you’ll receive a pot of money for your family should you pass away before retirement or within 5 years of retirement, and an ill-health retirement benefit that allows you to access your pension benefits before your Normal Pension Age (NPA) without the usual reduction applied to an early retirement pension.

As part of the career average scheme, you’ll also be entitled to convert part of your pension into a lump sum. You'll also get access to a wider range of scheme flexibilities allowing you to purchase a faster accrual rate in chosen years or to buy out any early retirement reduction over the age of 65.

If you were part of the previous scheme (final salary), the benefits you accrued prior to your transition will be protected and remain in your final salary arrangement. If you have benefits in both final and career average schemes, you’ll receive the benefits that you’ve built up in both arrangements.

Make the most of your retirement, with expert financial advice from Wesleyan Financial Services.

Retirement advice for teachers

Frequently asked questions

When can I collect my Teachers’ pension?
You can access your pension when you reach your Normal Pension Age, or earlier if you choose to take an early retirement.

New members in the career average scheme have an NPA of either 65 or your state pension age, depending on which is at the later date.

Older members who are in the career average scheme but have already built up benefits in the final salary scheme, have more than one pension age.

Your final salary benefits depend on when you joined pensionable service:

Started before 1 January 2007? Your final salary NPA is 60, if you haven’t transferred out, had a break of five years or more, or had a repayment of contributions.

Started after 1 January 2007? Your final salary NPA is 65.

Your career average benefits NPA is either 65 or your state pension age, depending on which is at the later date.
What happens to my Teachers' Pension if I have a break in service?

There are lots of complexities around taking a career break from teaching, but in general:

Members who are out of service for more than 5 continuous years before re-joining the scheme will enter the career average arrangement. Members who are out of service but return after a single break of less than 5 years will retain any protections to which they were entitled before they left, including their salary link.

The salary link provision is for transition members who have both final salary and career average benefits. This means that when your final salary benefits are calculated, the salary you earned in the career average arrangement will be used in that calculation.

For a more detailed explanation of how this works, speak to a Specialist Financial Adviser.
Can I opt out of the Teachers’ Pension Scheme?

Yes. If you opt out within the first 3 months of your teaching contract, your employer will refund any contributions you’ve already made. If you opt out after these 3 months have passed, your request will be effective from the first day of the following month the opt out form is received. You can opt out through the Teachers’ Pensions website.
Can I delay taking my Teachers’ Pension?

Yes, you can delay taking your pension. If you don’t want to take your benefits straight away, they’ll be backdated to either your last day of service or when you reached your normal pension age (whichever is later). You’ll then receive your backdated payments as a lump sum that will be subject to tax.
Can I pay more into my Teachers’ Pension?

Yes, there are two ways to do this. Firstly, you can buy additional pension in multiples of £250 each year. You can pay a one-off lump sum, or you can have the money deducted from your salary.

There are limits to how long you can buy additional pension for. The maximum payment period is twenty years, and it must be completed before your normal pension age.

Secondly, you can pay higher contributions to increase your pension for a chosen scheme year (1st April – 31st March). This is known as faster accrual. If you want to increase your pension contributions, you must let your employer know no later than January of the year you want to start paying more. Your increased pension contributions will last for one year. After that, your contributions will go back to normal or you can re-apply.
Can I take my Teachers’ Pension and still work?

Yes, you can take some of your pension and still work by taking a phased retirement. This allows you to take up to 75% of your pension while still contributing to the Teachers’ Pension Scheme.

There are caveats around this however, so we recommend you read the full explanation on how this works in our retirement planning guide.
Can I transfer into my Teachers’ Pension?

Yes, but you need to be quick. You can transfer any pension credit in the first year of being in the Teachers’ Pension Scheme. The previous pension scheme must meet HM Revenue and Customs (HMRC) requirements.

You can transfer your pension credit by logging into your account on the Teachers’ Pension website and filling in the form.

Changes to the Teachers’ Pension Scheme

Stay up to date with the latest changes to the Teachers’ Pension Scheme, including updates to contribution rates and benefits.

Retirement planning guide for teachers

Get prepared for life beyond the classroom, with specialist advice on how you can make the most of your Teachers’ Pension and retirement income.

Webinars for teachers

Discover a series of free webinars designed especially for teachers - focused on the financial issues that really matter to you.