Teachers’ Pension phased retirement: how the rules work in 2026/27

Most people picture retirement as a single day: you teach your last lesson on the Friday and you are a pensioner on the Monday. The Teachers’ Pension Scheme has a more gradual option called phased retirement, which lets you start drawing part of your pension while you carry on working, as long as you genuinely wind down. It is popular with teachers stepping back from a leadership role, dropping to part time, or easing towards a full stop rather than slamming into one.

It also comes with conditions that trip people up: a minimum cut to your salary, a window to apply, a cap on how much you can take, and a limit on how many times you can do it. This explains how phased retirement works in 2026/27, what each rule actually means, and what changes in 2028. For the scheme as a whole, our Teachers’ Pension Scheme guide is the place to start. As always, your own figures come from Teachers’ Pensions, not from a rule of thumb.

What phased retirement is

Phased retirement is a way of drawing part of your Teachers’ Pension before you stop work completely. Instead of giving up teaching and claiming your whole pension, you reduce your working commitment, by going part time or moving to a less senior role, and take a slice of your pension to top up the lower salary. You stay in pensionable employment, so the part of your pension you have not touched carries on growing.

The key word is reduce. Phased retirement is built around a genuine fall in your earnings, which is why the scheme sets a minimum cut and asks your employer to confirm it. You do not have to stop working, but you do have to be doing meaningfully less. It is a different thing from simply retiring early and taking everything at once, and different again from the actuarially reduced early retirement that lets you take your whole pension before your normal pension age.

The eligibility rules

Four conditions have to be met. None of them is complicated on its own, but they work together, and missing one (most often the application window) is what causes problems.

Age. You can take phased retirement from age 55, up to 75. From 6 April 2028 the minimum pension age across most UK pensions rises from 55 to 57, and that floor applies here too. Teachers with Teachers’ Pension Scheme service on or before 3 November 2021 keep a protected pension age of 55, so the rise to 57 does not affect them; if that might be you, ask Teachers’ Pensions to confirm.

The salary reduction. Your pensionable earnings must drop by at least 20% compared with the average of your previous 12 months. The reduction has to be real and lasting: you must keep your salary down for at least 12 months (the scheme allows for normal annual pay increases within that). This is the rule that defines phased retirement, and it is why the option suits a planned step down rather than a sudden change.

The application window. Your application has to reach Teachers’ Pensions within 3 months of the salary reduction taking effect. Miss that window and you may have to wait and engineer a fresh reduction later. Because the change is tied to your contract, your employer has to be on board, so this is a conversation to have well before the pay change, not after.

How much you can take, and what it costs

You can draw up to 75% of your accrued pension benefits at a phased retirement. You choose the proportion, up to that ceiling, and the rest stays invested in the scheme and continues to build as you keep paying in on your reduced salary. That is the appeal of the design: you get income now without freezing the remainder.

There is a trade-off, and it is the same one that applies to any early payment. If you take pension before your normal pension age, the part you draw is actuarially reduced, meaning it is cut to reflect that it will be paid out over more years. The part you leave behind is not reduced and keeps growing. So phased retirement is not free money brought forward; it is a smaller amount now in exchange for a larger amount later on the slice you take. Whether that exchange suits you is a personal financial question, and not one this article can answer for you.

How many times you can do it

The number of phased retirements you can take depends on which part of the scheme your benefits are in.

• Career average benefits. You can take phased retirement up to three times before you finally retire, but only two of those can be before age 60.
• Final salary benefits. You can take two phased retirements before finally retiring.

Many serving teachers have benefits in both, because of the move to the career average scheme and the McCloud remedy that followed. If that is you, the counts apply to the relevant set of benefits, and Teachers’ Pensions will tell you how your particular record works. The administrator handling these applications has been changing, from Capita to Tata Consultancy Services, a transition we covered in our piece on the handover delay to October 2026, so allow time for processing.

What phased retirement is not

• It is not taking your whole pension. The cap is 75% of benefits at any one phased retirement; you cannot draw the lot this way and keep working.
• It is not redundancy or ill-health retirement. Those are separate routes with their own rules. Phased retirement is a voluntary, planned wind-down.
• It is not something your employer must grant automatically. Because it depends on a real, agreed reduction in your role or hours, your school or trust has to agree to the change that makes you eligible.

How to find out where you stand

The figures that matter, how much pension you have built up, how much a phased retirement would pay, and how big the reduction would be, are all personal to your record. Your Teachers’ Pensions online account and the benefit calculators there are the starting point, and Teachers’ Pensions can produce an estimate for a date and a proportion you are considering. Because the option turns on a contract change, your employer’s HR team is the other essential conversation. For free and impartial guidance on your options, MoneyHelper is the government-backed service, and for regulated advice on whether and when to draw your pension, you would speak to a financial adviser authorised by the Financial Conduct Authority.

Common questions

Pension Plain’s take

Phased retirement is one of the more flexible corners of the Teachers’ Pension Scheme, and it is underused largely because the conditions are not widely understood. The two that catch people are the 20% salary cut, which has to be a genuine, sustained change rather than a paper exercise, and the three-month application window, which is unforgiving. The mechanics reward planning: a step down agreed with your employer, timed deliberately, with an estimate from Teachers’ Pensions in hand before you commit. The scheme gives you the option; what it cannot give you is the judgement about whether a smaller pension now is worth more to you than a larger one later. That part is yours, and worth taking to impartial guidance before you decide.

Fact-checked: 17 June 2026