Teachers’ Pension Scheme: plain-English guide (2026/27)

If you’re a teacher in England or Wales, the pension scheme you’re in is one of the most generous deals you’ll find anywhere in UK employment. That’s not flattery, it’s just maths. Active members built up pension last year revalued by 5.4%, employers pay 28.68% of your salary into the scheme on top of what you pay, and most teachers who joined before 2015 are quietly sitting on a final salary pot that grows with their actual end-of-career salary, not the salary they earned when the scheme rules changed.

And yet most teachers underestimate the thing twice over. The two most common reasons: they don’t realise how much extra they accrue every year just from the inflation-plus-1.6% revaluation rule, and they don’t know how Phased Retirement actually works. We’ll get to both. First, the basics for 2026/27.

Which scheme are you actually in?

Most working teachers are in all three sections to some degree, even if they only think about the one they joined first. The TPS is technically a single scheme, but the rules have changed twice, and the section your service sits in determines how that pension is calculated, when you can take it, and what kind of lump sum comes with it.

If you started teaching before 2007, you’ll have some 1988 service. If you started between 2007 and 2015, your pre-2015 service sits in the 2007 section. Anyone who joined before 2015 had been moved to the career average scheme by 1 April 2022, which is why everyone currently teaching, regardless of their entry date, is now accruing under 2015 rules.

How career average works in 2026/27

Each year you teach, the scheme banks 1/57th of your pensionable earnings into your career-average pot. So if you earn £45,000 in 2026/27, you’ve added £789 of annual pension (£45,000 ÷ 57) to that pot. Simple enough.

The bit most teachers don’t focus on is what happens to that £789 over time. While you’re an active member of the scheme, every chunk of pension you’ve ever accrued is revalued each April by CPI + 1.6%. CPI for 2026/27 is 3.8% (the September 2025 figure), so active accrual was uprated by 5.4% on 1 April 2026. That £789 became £830.59 overnight, and it’ll keep growing at inflation-plus-1.6% every year you stay in pensionable teaching.

The plus 1.6% is the magic number. Civil servants in the alpha scheme get CPI alone. NHS members in the 2015 scheme get CPI + 1.5%. Teachers get the highest active revaluation rate of any major public service scheme, and over a 30-year career that 1.6% annual uplift compounds to roughly a 60% real-terms increase on what you’ve accrued. It’s the single best reason “stay in teaching” is good financial advice.

Leave teaching for more than five continuous years, though, and your pre-break pot drops to the deferred revaluation rate, which is CPI alone. From the start of the break, your accrued pension keeps growing, but only with inflation. The plus 1.6% disappears for that pot. Anyone planning a long career break, particularly mid-career when accrued benefits are already significant, should price the cost of that decision before making it.

What you might still hold from before 2015

If you started teaching before April 2015, your pre-2015 service is sitting in either the 1988 final salary section, the 2007 final salary section, or both. Those benefits don’t grow any more in service terms, you stopped accruing in them in 2015, or 2022 if you had transitional protection. But here’s the thing most teachers don’t realise: those final salary benefits are still being calculated against your current salary, not the salary you had in 2015.

The Salary Link is your friend

The Salary Link applies to anyone who moved from final salary to career average and has continuous TPS service since (no single break of more than five years). When you eventually retire, your final salary benefits use your average salary at retirement, typically the better of your last 12 months or the best three consecutive revalued years from your last ten.

So if you joined in 2002, had 13 years of pre-2015 service in the 1988 section, and you retire in 2030 on a head-of-department salary of £75,000, your 1988 pension is calculated as 13 × £75,000 ÷ 80 = £12,188 a year, plus an automatic tax-free lump sum of 3 × £12,188 = £36,563. Not bad for “old” service. The 2030 salary, not the 2015 salary, drives that calculation.

This matters most for teachers who get promoted late in their career. A senior leader in a multi-academy trust whose final salary jumped from £45,000 in 2015 to £85,000 by retirement gets the larger number used in the 1988 calculation. The Salary Link is one of the most under-explained features of the post-2022 setup, and it’s worth more to most senior teachers than any single flexibility option.

One caveat: if your pensionable salary in any of your final three years was uplifted by more than £8,020 (or 10%, whichever is higher), the increase is restricted to that amount for the final salary calculation. The figure is uprated each year by HM Treasury, it was £7,726 for 2025/26.

Member contributions: six tiers, paid per employment

Member contribution rates are unchanged for 2026/27. The salary thresholds were uplifted by 3.8% in line with September 2025 CPI; the percentage rates themselves are identical to last year. Same six-tier structure that’s been in place since 2015.

Teachers’ Pension Scheme member contribution rates for 2026/27

Annual salary rate from 1 April 2026	Member contribution rate
Up to £36,198.99	7.4%
£36,199.00, £48,727.99	8.9%
£48,728.00, £57,776.99	9.9%
£57,777.00, £76,572.99	10.5%
£76,573.00, £104,413.99	11.6%
£104,414.00 and above	12.0%

One detail catches a lot of teachers out: your contribution rate is set by your actual salary in each individual employment, not your full-time-equivalent salary, and not the total across multiple jobs. A teacher with a 0.5 FTE main job earning £30,000 and a separate part-time supply contract paying £8,000 is in the 7.4% band on each. Not the 8.9% band on the combined £38,000.

Contributions come out of your gross pay before income tax, so tax relief at your marginal rate is automatic. National Insurance relief isn’t, except where your employer puts contributions through salary sacrifice. The flexibility options (Faster Accrual and Additional Pension monthly contracts) typically run via salary sacrifice, which is why they save NI as well as income tax. We’ll get to those.

Employer contributions: 28.68%, locked until March 2027

Your employer puts in 28.68% of your pensionable earnings on top of what you pay. This is enormous, for a teacher on £45,000, the employer is paying £12,906 a year into the scheme. The base rate is 28.6%, plus a 0.08% administration levy.

The rate jumped from 23.6% to 28.68% on 1 April 2024 following the 2020 valuation. It’s locked at that level through 31 March 2027, and the next valuation (using 2024 data) is in train. Schools, academies, FE colleges and 16-19 institutions all get specific Department for Education grants to cover the increase. Universities that participate in the TPS don’t, which has put real financial strain on higher education TPS-participating departments since 2024.

When can you take your pension?

Each section has its own Normal Pension Age, the age at which you can take that section’s pension without an actuarial reduction:

• 1988 section: NPA is 60.
• 2007 section: NPA is 65.
• 2015 career average: NPA is your State Pension Age, or 65 if your SPA is below 65.

State Pension Age is currently rising. People born between October 1954 and April 1960 already have an SPA of 66. The transition from 66 to 67 runs from April 2026 to April 2028, depending on date of birth. After 6 April 2028, SPA is 67 for everyone subject to current legislation, with a further legislated rise to 68 timetabled for 2044 to 2046. So if you’re in your thirties planning around an NPA of 67, that target may shift to 68 before you actually retire.

The earliest age at which you can take any TPS pension is currently 55, with actuarial reduction. From 6 April 2028, that minimum age rises to 57 under the Finance Act 2022. Teachers who had service in either the final salary or career average scheme on or before 3 November 2021 keep a protected pension age of 55, both for early retirement and for phased retirement. Anyone who joined the scheme for the first time on or after 4 November 2021 won’t be able to take their TPS pension until 57.

Phased retirement: the most underused power-tool in TPS

Of all the ways to take your TPS, phased retirement is the one most teachers don’t fully understand and most experienced teachers benefit from. It lets you draw part of your pension while continuing to teach, and continuing to build new pension on top of it.

The conditions:

• You’re 55 or over (rising to 57 in April 2028 unless you have a protected pension age).
• Your pensionable salary drops by at least 20% compared with your average pay over the previous 12 months. Normal annual pay rises don’t count toward the drop.
• The reduced salary has to last for at least 12 months.
• You apply within three months of the salary reduction starting.

Then you can take up to 75% of any of your pension scheme accounts. Career average members get up to three phased retirements before fully retiring (only two of which can happen before 60). Final salary members get two. People with mixed service can take different proportions from each section.

Where it gets interesting is that you become a “dual-capacity member”, both a pensioner and an active member at the same time. You keep paying contributions on your reduced salary, and you keep accruing further career average pension at 1/57. So for example, if you’re 60, you’ve stepped down from a head of department role to a regular teaching contract on a 30% salary cut, and you take 75% of your 1988 final salary pension at NPA 60 with the automatic 3× lump sum, you’ve effectively converted that pension pot into income, and you’re still building further career average benefits on the lower salary.

For long-serving teachers with significant pre-2015 final salary service, this is the single most valuable retirement-planning option in the scheme. Used well, it more than offsets the income drop from a step down. Used badly, taking phased retirement before NPA, with significant actuarial reduction, just to get cash early, it can be expensive. The case is worth modelling carefully, ideally with a regulated adviser who knows public service pensions.

Faster Accrual, Buy Out and Additional Pension

Career average members have three “flexibilities” to buy more pension or buy out future early-retirement reductions. They share a single annual cap of £8,900 of extra pension for 2026/27, combined, not each.

Faster Accrual

Pay extra contributions to accrue at 1/55, 1/50 or 1/45 instead of 1/57 for that scheme year. Each election lasts a year, runs from 1 April to 31 March, and you have to make a fresh election before the start of each scheme year (typically by 31 January). Cost is age-banded, a 30-year-old paying for 1/45 typically pays around 5-6 percentage points of extra contribution; the cost rises sharply with age. Bought via salary sacrifice, so you save National Insurance as well as income tax. Faster Accrual benefits revalue at active CARE rates (CPI + 1.6%) for as long as you stay in teaching.

Buy Out (AAB Buy Out)

Buy out the actuarial reduction that would otherwise apply if you take career-average benefits before NPA. Available in years of NPA−1, NPA−2 or NPA−3, with a floor of 65. So if your NPA is 67, you can buy out two years (back to 65). The election must be made within six months of joining the career average scheme or starting a new pensionable employment. It’s permanent for as long as you remain an active member, can’t be cancelled, and can’t be refunded if you end up working past 65 anyway.

Additional Pension

Buy chunks of annual pension in multiples of £250. Pay either by monthly payroll deductions (over 1-20 years, must complete before NPA) or by one-off lump sum. Pricing is age-banded, younger members pay less per £1 of pension purchased. Additional Pension revalues at CPI only, even while you’re an active member. So it doesn’t get the +1.6% in-service kicker.

So which one wins?

If you’re confident you’ll be teaching for the long haul, Faster Accrual usually beats Additional Pension because the +1.6% revaluation compounds. If you’re not sure, Additional Pension is more robust because both products revalue identically once you leave the scheme. Members regularly mix them up, they aren’t substitutes. And if you want to retire before SPA without a reduction, Buy Out is the only option that delivers that, but it eats your headroom for the other two.

Lump sums and commutation: read this before you max out the cash

Two routes to a tax-free lump sum at retirement. They work differently across the sections.

Automatic lump sum (1988 section only). If you have service in the 1988 final salary section, you get an automatic tax-free lump sum equal to 3 × your annual pension from that section. No election, no commutation, you just get it. The 2007 final salary section and the career average section have no automatic lump sum.

Commutation (any section, service from 1 January 2007 onwards). You can give up £1 of annual pension for £12 of additional tax-free lump sum, up to a cap of 25% of the capital value of your benefits in that section. The Lump Sum Allowance for 2026/27 is £268,275, that’s the lifetime cap on tax-free pension cash across all your pensions, unless you have pre-April-2024 LTA protection that gives you a higher figure.

Mixed-section members can choose different commutation proportions in each section. So you might take only the automatic 3× from your 1988 section while commuting the maximum 25% from your 2007 and career average sections, or any combination of the above.

Worth saying clearly: 12:1 commutation is poor value. You’re swapping £1 of inflation-linked annual income (which would compound for the rest of your life and pay survivor benefits) for £12 of cash today. Buy that pension back as an annuity on the open market and £12 wouldn’t get you anywhere close to £1 a year of inflation-linked income. The automatic 3× FS80 lump sum is fine, that comes free. Commuting beyond the automatic, particularly for the career-average pot, needs a reason: a mortgage to clear, a one-off cost, a planned use that genuinely beats keeping the income. Don’t reflexively max out the 25% just because the 25% is allowed.

What happens to your family

The TPS family benefits are some of the more generous in the public service, but the rules are dated by when each category of survivor became eligible.

Death in service. A death grant of 3 × your annual pensionable earnings is paid to your spouse, civil partner or qualifying surviving partner, automatically, unless you’ve nominated someone else via My Pension Online. You can nominate any individual, but not a trust or charity. If there’s no surviving partner and no nomination, the grant goes to your estate.

Short-term pension. For three months after death, your surviving adult continues to receive the equivalent of your full salary (if you were an active member) or your full pension (if you were retired). Same again for any dependent children. With no surviving adult, six months goes for the children.

Long-term survivor pension. Career average members give a survivor pension of 37.5% of their accrued CARE pension, with an enhancement if they die in service. Final salary members give 1/160 of final average salary per year of survivor benefits service. Mixed-service members get both calculations added together. Survivor pensions on service from 1 January 2007 onwards are paid for life, they don’t cease on remarriage, unlike some older public service schemes.

Cohabiting partners. Unmarried partners can receive a survivor pension if you were in pensionable service on or after 1 January 2007 and completed at least two years of pensionable service from that date (or paid additional contributions to cover earlier service for family benefits). Your partner needs to evidence an exclusive, long-term, financially-dependent or interdependent relationship, utility bills, joint accounts, that kind of thing. Service before 1 January 2007 doesn’t count for cohabitee survivor pensions, full stop. If you’re a long-serving teacher who started teaching pre-2007 and haven’t married, this gap is worth understanding before it matters.

Children’s pensions are payable until age 17, or up to age 23 if they’re in full-time education or vocational training paying no more than £4,290 a year (the 2026/27 figure).

The Annual Allowance trap (yes, it can hit you)

For most classroom teachers, the Annual Allowance is a non-issue. The standard AA is £60,000 a year, and most teachers’ Pension Input Amounts (the technical measure of how much your pension grew in tax terms) are well below that.

Senior leaders are a different story. Heads, deputy heads, principals of multi-academy trusts and senior university academics on TPS-participating contracts can see their PIA approach or exceed £60,000, particularly in years of significant pay rises or after returning from career breaks where the pension catches up under active revaluation. The 2022/23 tax year was particularly painful, September 2022 CPI was 10.1%, the active revaluation rate was 11.7%, and a lot of senior teachers got Pension Savings Statements they didn’t expect.

If you’re caught, the safety valve is Mandatory Scheme Pays: where your TPS PIA exceeds £40,000 in the year, your tax charge in TPS exceeds £2,000, and your election is in by 31 July following the end of the tax year, the scheme settles the charge directly with HMRC and reduces your eventual pension by an actuarially calculated amount. Voluntary Scheme Pays is also available below those thresholds, but elections received after 31 January following the end of the tax year incur HMRC interest and late-payment charges that fall on you, not the scheme.

Members affected by the McCloud remedy have until 6 July 2027 to elect Mandatory Scheme Pays for retrospective tax charges relating to the 2019/20 to 2022/23 remedy period years.

McCloud Remedy: where you stand in 2026

If you were active in the TPS on 31 March 2012 and accrued service after 31 March 2014, with no continuous break of more than five years, you’re in scope of McCloud. Your service in the remedy period, 1 April 2015 to 31 March 2022, has been rolled back into the final salary scheme by default, and at retirement you’ll choose (via a Remediable Service Statement) whether to keep that final salary treatment or convert to career average for those seven years.

The choice is binary and made once. You can’t keep career average for some of those years and final salary for others. For most active teachers, the decision is deferred to the date you actually retire, when the RSS is issued as part of the retirement application.

Some members have to make their choice earlier. If you used Faster Accrual, Buy Out or career average Additional Pension during the remedy period, or worked overtime or excess service in the career average scheme during those seven years, you’ll get a rectification RSS in advance and have 12 months from issue to decide. If you don’t, the regulations let the scheme manager pick the higher-value option for you.

The retired-member rollout is materially behind. The original deadline was 31 March 2025 to send all “Immediate Choice” members their RSS. About 77,600 retired teachers were still waiting at that point. By mid-November 2025 it was 69,700. As of 1 April 2026, around 68,307 RSSs were still outstanding. The Department for Education has said it’s working with TCS, the incoming administrator, to finalise a new completion timetable, but no firm date has been published. The Cabinet Office’s stated aim across all public service schemes is to be done by 2027.

If you’re a retired teacher waiting for your RSS, you’re not unusual, over half of the affected pensioners are still waiting in 2026. Backdated payments come with interest, and the official line is that no member should be financially disadvantaged by the delay. But for retired teachers waiting in real time, the wait is real, and the financial consequences (deciding between two retirement income calculations, planning around survivor benefits) aren’t trivial. We’ve covered the wider remedy across schemes in our McCloud Remedy guide, that explains how the rollback works in more detail.

Capita to TCS: what’s happening with administration

Teachers’ Pensions, the operating brand for the TPS administration, has been run by Capita since 1996. In 2023, the Department for Education awarded a 10-year, £233 million contract to Tata Consultancy Services. The handover was originally scheduled for October 2025, then pushed to summer 2026, and most recently delayed again to late 2026.

For now, nothing changes for members. Capita continues to run My Pension Online, the contact centre on 0345 606 6166, and the Lingfield Point office in Darlington. A separate TCS Employer Portal opened earlier in 2026 so schools and other employers can pre-register, but member-facing systems are still Capita-operated.

When the handover does happen, your benefits won’t change. The DfE has been explicit that the change of administrator has no impact on entitlements. Members will probably need to re-register on the new portal during the transition, similar to what Civil Service members had to do when their administration moved to Capita in December 2025. Watch the Teachers’ Pensions news page for the actual cutover date when it’s confirmed.

Common questions

Which TPS section am I in?

It depends on when you started teaching. Pre-January 2007 starters built up service in the 1988 final salary section (1/80, NPA 60). Anyone who joined between January 2007 and March 2015 has 2007 final salary service (1/60, NPA 65). Everyone teaching now is accruing in the 2015 career average section (1/57, NPA = SPA). Mixed service is normal, your benefit statement on My Pension Online shows what you have in each section.

Why is my employer paying nearly 29% into my pension?

The employer rate jumped from 23.6% to 28.68% on 1 April 2024 after the 2020 valuation showed the scheme needed more funding to meet present and future obligations. Schools, academies, FE colleges and 16-19 institutions are funded by the DfE for the increase via the Teachers’ Pension Scheme Employer Contribution Grant. Universities aren’t, which is why TPS-participating universities have been under sustained financial pressure since 2024. The rate is locked at 28.68% until 31 March 2027, then resets following the 2024 valuation.

Is Faster Accrual or Additional Pension better value?

Depends how long you’ll stay teaching. Faster Accrual costs more per £1 of pension purchased, but the £1 it buys revalues at CPI + 1.6% in service. Additional Pension costs less per £1 but only revalues at CPI even while you’re active. If you’re confident you’ll teach long-term, Faster Accrual usually wins. If you might leave the profession in the next decade, Additional Pension is more robust because both products revalue identically (CPI) once you leave. They share a £8,900 combined annual cap for 2026/27, so you can’t max both.

Can I take my pension while still teaching?

Yes, that’s phased retirement. You need to be 55 or over (rising to 57 from April 2028 unless you have a protected pension age), drop your pensionable salary by at least 20% and keep it down for at least 12 months, and apply within three months of the salary drop. Then you can take up to 75% of any of your pension scheme accounts. You become a dual-capacity member, pensioner and active, and you keep building further career average pension on the reduced salary. It’s the most powerful retirement-planning tool in the scheme.

What happens to my pre-2015 pension if I leave teaching?

If you leave for less than five continuous years and come back, your final salary service keeps the Salary Link, your eventual final salary pension uses your salary at the date you finally stop teaching. If you leave for more than five continuous years, the Salary Link breaks. From the start of the break, your pre-2015 final salary service uses the salary you had at the break, revalued only by CPI from then on. Same applies to career average benefits, they drop to deferred CPI revaluation, losing the +1.6% kicker.

I’m a retired teacher and still haven’t received my Remediable Service Statement. What should I do?

You’re not alone, about 68,000 retired teachers were still waiting at the start of April 2026. The DfE is working with TCS to finalise the rollout timeline, but no firm completion date has been set. Your current pension will be paid on the rolled-back final salary basis for the remedy period in the meantime. When your RSS does arrive, you’ll have 12 months to choose between final salary and career average for those seven years (1 April 2015 to 31 March 2022), and any backdated adjustment is paid with interest. You don’t need to chase, but if your circumstances are particularly time-sensitive, for example planning a major financial decision, contact Teachers’ Pensions on 0345 606 6166 and explain.