Teachers' Pension Scheme Explained

What kind of pension is the Teachers' Pension?

Since 2015 the Teachers' Pension Scheme has been a career-average revalued earnings scheme, usually shortened to CARE. The older final salary arrangements still exist for service built up before then, and many experienced teachers have both — more on that in the CARE vs final salary comparison.

In a CARE scheme you do not worry about your final salary, promotion timing or the classic final-salary traps. Every single year stands on its own: you build a slice of pension based on that year's pay, and it is yours forever, adjusted for inflation.

The 1/57th rule

For every year of membership you earn 1/57th of your pensionable pay as annual pension. On the 2026/27 M4 point of £40,940, one year of membership builds £40,940 ÷ 57 = £718 a year of pension, for life.

That sounds small until you stack the years up. Twenty-five years of service at that level builds around £18,000 a year before any revaluation — on top of the State Pension.

How your pension keeps its value: revaluation

Every year, the pension you have already built is increased by the Consumer Prices Index plus 1.6% while you are still paying in. This is the mechanism that makes the scheme genuinely valuable — your accrued benefits are protected in real terms without you taking any investment risk.

The same £5,000 of pension grows £2,713 more if you stay in the scheme than if you leave it and let it sit deferred. That gap is the real cost of opting out, before you even count the employer contributions you stop receiving.

What you pay in: the contribution tiers

Member contributions are tiered between 7.4% and 12.7% of pensionable pay. The tier is set by your full-time equivalent salary — the headline figure for your pay point — not what you actually receive if you work part time. This catches out a lot of part-time teachers, and it matters enough that we have a dedicated contributions guide.

What your employer pays in

Your employer contributes 28.8% of pensionable pay on top of your own contribution. On M4 that is £11,791 a year — money that never touches your bank account but buys guaranteed pension that would cost far more to replicate privately.

For context, the auto-enrolment minimum in a private-sector workplace pension is 3% employer contribution. The TPS employer rate is nearly ten times that. When people ask whether the teachers' pension is any good, this is the first number to reach for.

When can you take it?

Your Normal Pension Age in the CARE scheme is linked to your State Pension age, so for most teachers now in their 20s to 40s that means 67 or 68. Final salary service has its own NPA — 60 for the pre-2007 section and 65 for the 2007 section.

• Minimum pension age is 55, rising to 57 on 6 April 2028. You can take benefits from then, but taking them before NPA triggers an actuarial reduction.
• Flexible retirement lets you draw some benefits while continuing to teach, including returning after retirement under the 2023 changes.
• Ill-health retirement pays enhanced benefits if you cannot work, with tiers depending on how likely you are to return.
• The full detail of reductions and options is in our early retirement guide and the pension age explainer.

A worked example: what a career actually builds

Take a teacher who is 40 now, on M6 (£46,939), planning to teach until 67 — 27 more years. Assuming 2% annual pay growth and 2% CPI:

Part-time careers build proportionally less but lose nothing else. A 0.6 FTE teacher on M4 across a 30-year career builds roughly £29,000 a year of pension on the same assumptions — and every one of those years counts fully towards qualifying service.

The tax-free lump sum

You can exchange some annual pension for one-off tax-free cash at a rate of £12 of cash for every £1 of annual pension given up, capped at roughly 25% of the capital value of your benefits — about 5.36 times your annual pension in practice.

Members with final salary service at NPA 60 also receive an automatic lump sum of three times that section's pension, separate from any commutation. The lump sum calculator lets you test the trade-off and see the breakeven.

What happens if you leave teaching

Your pension does not disappear. It becomes deferred: it stops growing at CPI plus 1.6% and grows at CPI only, and you can claim it from your NPA (or earlier with reductions). You can also transfer it to another scheme, though transfers out of public service schemes have become far less attractive since the 2022 valuation changes.

If you are considering leaving, read the leaving teaching financial guide before you resign — the revaluation difference alone is worth thousands, and the resignation deadline tool will keep you on the right side of the Burgundy Book dates.

Common questions and misconceptions

The scheme generates an enormous amount of confusion, much of it around the McCloud remedy (the correction for age-discrimination in the 2015 transition), what happens to contributions during maternity leave, and how the tiers interact with part-time pay. We cover each in depth: the contributions guide, the CARE vs final salary comparison, and the Scottish scheme differences.