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Teachers’ Pension Scheme Guide
The Teachers’ Pension Scheme (TPS) has an employer contribution rate of 28.68% — the highest of any major UK public sector scheme. Combined with a 1/57th career average accrual rate, TPS is one of the most valuable workplace pension benefits in the country.
Updated July 2026 · 2026/27 figures
Teachers in England and Wales belong to one of two TPS sections: the career average section (post-2015, for most active members) or the final salary section (legacy benefits accrued before 2015). Both sections are defined benefit and provide a guaranteed income for life.
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Start from your Benefit Statement and see your career average pension at State Pension age, with the lump sum option.
The two TPS sections
| Section | Type | Accrual rate | Normal Pension Age | Auto lump sum? |
|---|---|---|---|---|
| Final salary (pre-2015) | Final salary | 1/80th per year | 60 (pre-2007) / 65 (post-2007) | Yes — 3/80ths per year |
| Career average (2015+) | CARE | 1/57th per year | State Pension Age (67) | No (commutation only) |
Career average section: how it works
The current TPS is a Career Average Revalued Earnings (CARE) scheme. Each year, you earn a pension of 1/57th of your pensionable pay. That slice is then revalued each year by CPI + 1.6% until you draw your pension.
Accrual example
A teacher on a salary of £38,000 earns: £38,000 ÷ 57 = £666.67 of annual pension for that year. After a 35-year career with average earnings of £42,000, that builds to roughly £25,789/year before revaluation — before adding any final salary legacy benefits.
Member contributions (2026/27)
| Pensionable pay band | Member contribution |
|---|---|
| Up to £32,135 | 7.4% |
| £32,136 – £43,259 | 8.6% |
| £43,260 – £51,292 | 9.7% |
| £51,293 – £67,022 | 10.2% |
| £67,023 – £78,470 | 11.3% |
| Over £78,471 | 11.7% |
The TPS employer contribution rate of 28.68% is exceptional. On a £40,000 salary, your employer puts the equivalent of £11,472 per year into your pension. Many private sector employers contribute 3–5%. This is the single most important financial benefit a teaching role provides — a fact many teachers don’t fully appreciate.
Final salary section: legacy benefits
Teachers who were members before April 2015 retain final salary benefits for that earlier service period. Two sub-sections exist:
Pre-2007 final salary (NPA 60)
- Accrual: 1/80th of final pensionable salary per year
- Automatic lump sum: 3/80ths of final salary per year of service
- Normal Pension Age: 60
- Final salary definition: Best of last year or best consecutive three years in last ten
Post-2007 final salary (NPA 65)
- Accrual: 1/60th of final pensionable salary per year
- No automatic lump sum (commutation available)
- Normal Pension Age: 65
Final salary example (pre-2007)
A Head of Department who joined in 2000, accrued 15 years of pre-2007 benefits, and retired with a final salary of £52,000:
- Annual pension: (15 ÷ 80) × £52,000 = £9,750/year from age 60
- Automatic lump sum: (15 × 3 ÷ 80) × £52,000 = £29,250
This is on top of whatever career average pension they have built since 2015.
The McCloud remedy
The McCloud judgment applies to TPS. The remedy period runs from 1 April 2015 to 31 March 2022. Eligible members who were in the final salary section and moved to career average will be given a choice at retirement: apply the legacy scheme or the career average scheme for the remedy period, whichever is more beneficial.
For most teachers, the final salary section is likely to be better for the remedy period — particularly those with higher-than-average career salary growth. The Teachers’ Pensions administrator will provide a comparison when you retire.
Weighing the two in Isaac. Which is better isn’t always obvious: one option may start sooner, the other pay more each year once it starts. In the Isaac app, open the pension and use “Comparing two options from your statement?”. Enter the other option from your statement (in two parts if it comes that way, each with its own lump sum) and Isaac shows the age the larger pension catches up, what each pays out by 80, 85 and 90, and your chance of reaching the catch-up age. It can then put the other option in your plan, or save a copy of your plan with it to compare the two side by side.
Normal Pension Age and early retirement
The Normal Pension Age for the career average section is State Pension Age (currently 66, rising to 67 between 2026 and 2028). Final salary section NPAs are 60 (pre-2007) or 65 (post-2007).
You can take your career average pension early, from age 55 (rising to 57 in 2028), with an actuarial reduction. The reduction is approximately 3% per year before NPA for each year retired early. Retiring 10 years early would typically reduce the pension by around 26%.
Isaac doesn’t calculate Teachers’ Pension entitlements, but once you have your Benefit Statement, turn on Teachers’ Pension and add each arrangement: final salary with a pension age of 60 or 65, and career average. Picking one fills in its usual pension age, CPI increases and survivor’s pension, the NPA 60 arrangement’s automatic lump sum is one tap, and a £12-for-£1 helper works out a bigger lump sum. Isaac then shows how every part fits with your State Pension, ISAs, property and spending, year by year, including the years between 60 and your State Pension age.
Model your Teachers’ Pension in Isaac →Free to start, in your browser or the app. Isaac is a planning tool, not financial advice.
Death benefits
- Death in service: Lump sum of 3× pensionable pay
- Survivor pension: 37.5% of the prospective pension (career average section); 50% for final salary members
- Children’s pensions: Available for eligible dependent children
- Death in deferment: Lump sum of 5× deferred pension for deferred members
Additional Voluntary Contributions (AVCs)
TPS does not offer its own AVC arrangement, but teachers can save into a separate AVC plan through their employer’s chosen provider, or open a personal SIPP. AVCs or SIPP savings can be used to provide a tax-free lump sum at retirement, topping up the TPS income.
Leaving TPS
If you leave teaching or opt out of TPS with at least 2 years of qualifying membership, you become a deferred member. Your accrued pension is preserved and revalued in line with CPI annually until you draw it at NPA. You do not lose your pension by leaving the profession.
You can re-join TPS if you return to a qualifying teaching role. Benefits accrue separately and are added together at retirement.
Practical planning tips
- Check your annual benefit statement: Log in to Teachers’ Pensions at teacherspensions.co.uk to see your projected benefits
- Understand your NPA mix: If you have pre-2007, post-2007, and career average benefits, you may have three different NPAs — understand which comes first and plan accordingly
- Consider the value of staying in: At a 28.68% employer contribution, opting out of TPS to take the employer cash is almost never worth it — the guaranteed DB income is far more valuable
- Plan the bridging gap: If you retire before 67 on career average, model how you fund the years between retirement and NPA
Official resources
- Teachers’ Pensions — official scheme administrator
- Teachers’ Pension Scheme — GOV.UK
- NASUWT — TPS guidance for members
- McCloud remedy — Teachers’ Pensions
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