A guide to the Teachers’ Pension Scheme

Helping you understand the scheme


What is the Teachers’ Pension Scheme?

The Teachers’ Pension Scheme 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. When you contribute from your net pay, you’ll get tax relief, either paid into your pension or reclaimed through your tax return.

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, so it helps to get advice from a Specialist Financial Adviser from Wesleyan Financial Services.

What type of member am I?

If you joined (or join) the scheme 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 1st April 2012. 

Protected members 

If you’ve been an active member of the scheme since 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

A recent ruling, known as the McCloud judgement, has found the protections introduced in 2015 to be discriminatory against younger members of the public sector pensions schemes including the TPS. 

From 1st April 2022, it is proposed that all active members of the Teachers’ Pension Scheme who continue as active members of the TPS, will be moved into the Career Average (reformed) Scheme.

Following consultation, it’s been decided that members will be asked to make their choice when they access their benefits. This approach, known as ‘Deferred Choice Underpin (DCU)’, allows members to make a choice based on their actual career and a known retirement date.

To find out more, read the latest changes to the Teachers' Pension Scheme or speak to a Specialist Financial Adviser from Wesleyan Financial Services.

How much do I pay in?

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)
Salary Range
Your contribution
Employer’s contribution
£0 - £28,169
£28,169 - £37,919
£37,919 - £44,961
£44,961 - £59,588
£59,588 - £81,225
Contribution rates for the Scottish Teachers’ Superannuation Scheme (STSS) and Scottish Teachers’ Pension Scheme 2015 (STPS 2015)
Salary Range
Your contribution
Employer’s contribution
£0 - £27,697
£27,698 - £37,284
£37,285 - £44,209
£44,210 - £58,590
£58,591 - £79,895
£79,896 and above

How much pension does a teacher get? 

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 £30,00 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 receive a tax-free lump sum and 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.

When it's time to collect your pension, you can explore your options in our guides to taking your pension.

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.

    Protected members in the final salary scheme can collect their pension at 60 or 65, depending on when you joined pensionable service:

    • Started before 1 January 2017? 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 2017? Your final salary NPA is 65

    Tapered and transition 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 are the same as protected members
    • 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.

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