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CARE vs Final Salary Teachers' Pension

The Teachers' Pension runs two systems side by side: the pre-2015 final salary sections and the career-average (CARE) scheme that replaced them. Most experienced teachers hold both, joined by the McCloud remedy. Here is how each accrues, who holds what, and which years pay best.

Updated August 2026 · STPCD 2026/27 pay scales · 2026/27 tax year

Your pension details

Your annual benefit statement shows the pension you have already built up. Enter that in “pension already built up”.

Projected pension at age 67

£72,552

a year, for life, rising with inflation

Already built up

£8,000

Added over 27 more years

£64,552

If you retire at 67

Retiring at your Normal Pension Age means no actuarial reduction. You would receive the full £72,552 a year.

Tax-free lump sum options

You can exchange pension for cash at £12 of lump sum for every £1 of annual pension given up, up to roughly 25% of the value of your benefits.

  • Maximum lump sum: £388,876
  • Pension left after taking it: £40,145 a year

What you and your employer pay in

  • Your contributions over 27 years: £209,667
  • Employer contributions at 28.8%: £550,330

Projection only. The Teachers' Pension Scheme publishes the official actuarial factors and your benefit statement is definitive. Assumes continuous membership and the CARE scheme.

Key takeaways

  • CARE builds 1/57th of each year's pay; final salary built 1/80th (with 3x lump sum) or 1/60th of final salary.
  • Final salary value depends on your leaving salary; CARE value is locked in year by year with no final-salary risk.
  • The McCloud remedy moved most members' 2015-2022 service back to final salary, with CARE from 2022.
  • At retirement, members with a remedy choice pick whichever treatment pays more — usually final salary for the protected years.
  • CARE's 1/57th is a faster headline accrual than 1/80th, but final salary had the automatic lump sum and lower NPA.

The two accrual systems

How each system builds pension
FeatureNPA-60 final salary2007 final salaryCARE (2015+)
Accrual1/80th of final salary per year1/60th of final salary per year1/57th of each year's pay
Lump sumAutomatic 3x pensionNone automaticOptional via commutation
NPA6065State Pension age
RevaluationPost-retirement CPI (in payment)Post-retirement CPICPI + 1.6% while active
Value driverYour final average salaryYour final average salaryEach year's actual pay

The headline accrual comparison flatters CARE — 1/57th builds faster per year than 1/80th — but the final salary sections carried two structural gifts: the automatic lump sum and, for NPA-60 members, retirement five to seven years earlier without reduction.

A worked comparison on the same salary

Take a teacher whose final average salary is £46,939 (M6), comparing what one year of service buys under each system:

One year of service on a £46,939 final salary
SystemPension builtLump sumPayable from
NPA-60 final salary£587/yr£1,760 automatic60
2007 final salary£782/yr—65
CARE£823/yr (that year's pay)Via commutation onlyState Pension age

Who holds what after McCloud

The 2015 transition moved nearly everyone to CARE, which the Courts later ruled age-discriminatory — younger members moved while older members kept final salary protections. The McCloud remedy (implemented from October 2023) restored fairness by moving most members' 2015-2022 service back into their final salary scheme, with CARE resuming from 1 April 2022.

For affected members — broadly everyone in service at the transition — the remedy created a choice at retirement: calculate the 2015-2022 period under legacy final salary rules or under CARE, and take whichever pays more. The scheme applies the choice automatically in your favour when the figures are run.

Who is in what, after the remedy
Member group2015-2022 servicePost-2022 service
In service before 2012Final salary (remedy applies)CARE
Joined 2012-2014Final salary (remedy applies)CARE
Joined from April 2015CARE (never in legacy)CARE
Joined after April 2022—CARE only

The practical differences that matter at retirement

  • Two retirement dates — final salary sections can pay unreduced at 60 or 65 while CARE waits for State Pension age. Mixed-service members often phase: legacy section at 60, CARE later.
  • Two lump sum positions — the automatic 3x applies only to NPA-60 service; CARE cash comes only from commutation.
  • Two reduction tables — early payment reduces each section against its own NPA, so the blended cost of retiring at 60 is a mix.
  • One statement, two currencies — your benefit statement shows each section separately. Always read them separately before any retirement decision.

Which years were your best buy?

Counter-intuitively, the most valuable years of a modern teacher's career are often the last final salary years — 2015-2022 for remedy members — because they convert a high late-career salary into a permanent pension with the automatic lump sum attached. CARE years buy full value too, but without the legacy sweeteners. This is why the remedy choice usually favours final salary treatment for protected members, and why the pension age structure matters more for mixed-service members than for pure-CARE joiners.

Checking your own position

  1. Your benefit statement separates final salary and CARE sections — read each on its own terms.
  2. Ask Teachers' Pensions for a remedy statement showing your 2015-2022 position under both calculations.
  3. For retirement estimates, request figures per section — blended numbers hide the phasing options.
  4. Model the CARE side with the teachers' pension calculator; use scheme estimates for the legacy sections.

Frequently asked questions

Is the teachers' pension final salary or career average?

Both, by period. Service from 2015 is career average (1/57th of each year's pay). Service before 2015 remains final salary — 1/80th with a 3x lump sum for the NPA-60 section, 1/60th for the 2007 section. After the McCloud remedy, most members' 2015-2022 service sits back in final salary.

What is the McCloud remedy in the teachers' pension?

The correction for age discrimination in the 2015 transition. Most members' 2015-2022 service was moved back to their final salary scheme, with CARE from 2022. At retirement, affected members receive the more valuable calculation of the two for the protected period.

Which is better, CARE or final salary?

Neither dominates. CARE builds faster per year (1/57th vs 1/80th) with no final-salary risk; final salary offered the automatic lump sum, lower NPA and a windfall for late promotions. For remedy members the scheme simply pays whichever calculation of 2015-2022 is worth more.

How does the teachers' pension 1/57th work?

Each year you build 1/57th of that year's pensionable pay as annual pension. On £46,939 (M6) that is £823 a year, revalued annually by CPI plus 1.6% while in service, paid for life from Normal Pension Age.

Do I still get a lump sum with the teachers' pension?

An automatic lump sum of 3x pension applies only to NPA-60 final salary service. CARE benefits have no automatic lump sum, but you can commute up to roughly 5.36x annual pension into tax-free cash at 12:1.

Why is my teachers' pension statement split into sections?

Because you hold benefits under different scheme rules with different NPAs, accrual rates and lump sum treatment. Each section pays on its own terms, so retirement planning needs the sections read separately — blended totals hide the phasing options.

Sources

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