How the Teachers' Pension Scheme works
The TPS is a defined benefit pension — guaranteed and index-linked, regardless of stock market performance. Since April 2015 it has run on a Career Average Revalued Earnings (CARE) basis: each year you build 1/57th of that year's pensionable salary, revalued annually at CPI+1.6% until you retire.
Example: an M4 teacher (£39,556) accrues £694 of annual pension per year of service. Over 30 years at that salary (ignoring pay rises), that's a projected annual pension of ≈£20,820 for life, increasing with inflation. In practice salaries rise over a career, so the real figure is higher — the calculator projects forward using your entered salary growth assumption.
How much do you contribute?
Your rate is tiered by actual salary, uplifted 3.8% from April 2026 in line with CPI:
| Annual salary (actual) | Contribution rate |
|---|---|
| Up to £36,198 | 7.4% |
| £36,199 – £48,727 | 8.9% |
| £48,728 – £57,776 | 9.9% |
| £57,777 – £76,572 | 10.5% |
| £76,573 – £104,413 | 11.6% |
| £104,414 and above | 12.0% |
An M4 teacher (8.9% band) pays £3,520/year; their employer pays £11,345/year (28.68%) — a combined 37.6% of gross going toward retirement, of which the teacher pays less than a quarter. The rate is based on actual salary, not full-time equivalent — a 0.6 FTE teacher on M4 (actual gross £23,734) sits in the 7.4% band. See our part-time calculator for the full picture. A pay award can also push you across a tier boundary — see our pay rise calculator for how that affects your net increase.
The employer contribution — pay you never see
Your employer contributes 28.68% of your pensionable salary directly to Teachers' Pensions — never appearing on your payslip, but real compensation nonetheless. For an M6 teacher (£45,352), that's £13,007/year, over £1,000/month.
If you joined before April 2015 — your Final Salary service
Pre-2015 service sits in the older Final Salary section, calculated differently and paid alongside your CARE pension.
Joined before 1 January 2007 ("1988" section): 1/80th of final salary per year, plus an automatic tax-free lump sum of 3/80ths per year (3× your annual pension). Normal Pension Age 60.
Joined 2007–2015 ("2007" section): 1/60th of final salary per year, no automatic lump sum. Normal Pension Age 65.
Worked example — 10 years pre-2015 service, final salary £45,352: 1988-section gives £5,669/year plus a £17,007 lump sum; 2007-section gives £7,559/year with no automatic lump sum. Add any post-2015 CARE pension on top.
The CARE section's Normal Pension Age is your State Pension Age, currently 67. The McCloud remedy means members with service around the 2015 transition can choose the more favourable calculation at retirement — this can only be assessed by Teachers' Pensions using your full service record; contact them directly or check my.teacherspensions.co.uk. If you're planning maternity leave, see our maternity pay calculator for how contributions work across each pay phase.
Should you opt out?
Opting out increases take-home immediately — for an M4 teacher (8.9% pension), roughly £235/month, not the full £293, since you also lose the tax relief. But your employer's 28.68% contribution (≈£11,345/year for M4) disappears entirely, and you stop accruing £694/year of guaranteed, inflation-proofed pension for every year opted out. Over a 20-year career, the forgone lifetime pension typically far exceeds the short-term take-home gain. See the homepage's pension opt-out comparison for how this plays out month by month.
Genuine short-term hardship is the clearest case for opting out temporarily — re-enrolling as soon as finances stabilise (employers must auto-enrol opted-out staff every three years) preserves most of the career pension.
Retiring early — what it costs
Normal Pension Age for CARE is your State Pension Age (currently 67); you can draw from 55 (rising to 57 from April 2028) with an actuarial reduction of roughly 3–5% per year early. A CARE NPA-67 pension of £20,000 could reduce to £13,000–£15,800 if taken at 60. Phased retirement, from age 55, lets you reduce hours by 20–40% and draw a proportional part of your pension while continuing to build further benefits. If you're facing redundancy near retirement age, see our redundancy pay calculator for how early pension access on redundancy retirement works.
Frequently asked questions
How much pension do I build up each year?
1/57th of your pensionable salary. For M3 (£37,101), that's £651/year; for M6 (£45,352), £795/year — revalued at CPI+1.6% every year until retirement.
What is the TPS contribution rate for 2025–26?
7.4% up to £36,198, rising in tiers to 12% above £104,414. Most classroom teachers sit at 7.4% or 8.9%. Based on actual salary, not full-time equivalent.
What does my employer contribute?
28.68% of your pensionable salary — for M4 (£39,556), that's £11,345/year, on top of your own contribution, never shown on your payslip.
What is the Normal Pension Age for TPS?
67 for CARE service (post-April 2015). Pre-2015 Final Salary service has NPA 60 (joined before Jan 2007) or 65 (joined 2007–2015). You can draw CARE from 55 (57 from April 2028) with a reduction.
How is the Final Salary section calculated?
1/80th of final salary per year plus an automatic 3/80ths lump sum (joined before Jan 2007, NPA 60), or 1/60th per year with no automatic lump sum (joined 2007–2015, NPA 65).
What is the McCloud remedy, and does it affect me?
It found the 2015 reforms discriminated against younger members. Those with service 2015–2022 can choose the better of legacy or CARE calculation at retirement — check your position via Teachers' Pensions directly.
Is the TPS pension index-linked?
Yes — CPI each April once in payment; CPI+1.6% while still accruing. Deferred pensions revalue at CPI only, without the 1.6% active bonus.
Can I pay more into TPS?
Yes, via Additional Pension Contributions (APCs) — lump sum or regular payments for extra pension at NPA. Speak to Teachers' Pensions or a financial adviser for current rates.