Estimate your TPS retirement income for Career Average and Final Salary sections with lump sum, early retirement and 2026 contribution rates.
| Earnings Band | Contribution Rate | Monthly Cost (at mid-band) |
|---|---|---|
| Up to £32,135 | 7.4% | £198.06 |
| £32,136–£43,259 | 8.6% | £322.39 |
| £43,260–£51,292 | 9.7% | £381.95 |
| £51,293–£67,431 | 10.2% | £506.68 |
| £67,432–£119,059 | 11.3% | £880.54 |
| Over £119,059 | 11.7% | Varies |
Employer contribution: 23.68% (2024/25). Total cost of TPS is among the highest in public sector.
The Teachers Pension Scheme (TPS) is the defined benefit occupational pension for teachers and some other education staff in England and Wales. It is administered by Capita on behalf of the Department for Education and is one of the most generous public sector pensions available, with an employer contribution of 23.68% — more than double the typical private sector employer contribution.
The TPS has three distinct sections depending on when you joined and when you accrued service. Understanding which section(s) apply to you is essential for accurate retirement planning.
The Career Average section operates on the same principle as the NHS 2015 scheme. Each year you earn 1/57 of your pensionable pay as pension. That annual slice is then increased by CPI until you retire. Your NPA is your State Pension Age (currently 67). This section now applies to all active TPS members for service from April 2015 onwards.
For example, a teacher earning £40,000 accrues £40,000 ÷ 57 = £701.75 of pension per year. Over 20 years of contributions (with CPI revaluation), this builds to a substantial retirement income without depending on your final salary figure.
Teachers who joined the TPS between 1 January 2007 and 31 March 2015 have Final Salary benefits for that service window at 1/60 of final salary per year. There is no automatic lump sum for post-2007 entrants, though benefits can be commuted at retirement. NPA for the Final Salary section is 65.
Teachers who joined before 1 January 2007 have the most generous historic benefits: 1/80 of final salary per year plus an automatic tax-free lump sum of 3/80 of final salary per year. A teacher with 20 years of pre-2007 service on a £42,000 final salary would receive £10,500/year pension plus a £31,500 automatic lump sum from that tranche alone. NPA is 65.
Like the NHS, TPS members were subject to the McCloud equalisation judgment. Teachers in the Final Salary section who were moved to Career Average in April 2015 had a remedy period assessed (2015–2022), and received the better of Final Salary or Career Average benefits for that window. The remedy was applied through "rollback" — Final Salary benefits were used as the default for the remedy period.
You can retire from TPS from age 55 (rising to 57 from 2028 for most members). If you retire before your NPA, benefits are actuarially reduced. For Career Average benefits the reduction is approximately 3-5% per year early, depending on your exact age. Phased retirement is also available from age 55, allowing you to draw part of your pension while continuing to work at reduced hours or salary.
If you die in service, a death grant of 3 times your annual pensionable pay is paid to your nominated beneficiary (this is more generous than the NHS 2015 scheme death grant). Your spouse, civil partner or qualifying partner receives an ongoing dependant's pension equal to approximately 37.5% of your earned pension entitlement. Children also qualify for a children's pension.
TPS members can pay Additional Voluntary Contributions (AVCs) to boost retirement income. The TPS AVC arrangement is administered by Prudential (Retrieve+). Alternatively, teachers can open a Self-Invested Personal Pension (SIPP) alongside their TPS, maximising the £60,000 annual allowance by combining defined benefit and defined contribution contributions.
If you leave teaching before retirement age, your TPS benefits are preserved as a deferred pension. Deferred pension is revalued annually by CPI until you claim it. You can claim deferred benefits from age 55 (Career Average) or 60 (Final Salary), with early retirement reductions applying if claimed before NPA. There is no penalty for leaving TPS — your accrued benefits remain safe.
Some teachers opt out of TPS to avoid the high contribution rates and invest the savings independently. While the employer contribution of 23.68% is very valuable, high-earning teachers close to the £60,000 annual allowance may consider opting out to avoid tax charges. Any decision to opt out should be taken with independent financial advice as TPS is generally one of the UK's most valuable pension arrangements.