Pillar guide · Public sector pensions

UK public sector pensions — the complete guide.

NHS, Teachers', LGPS, and Civil Service pensions compared. Accrual rates, pension age, the McCloud remedy, and the effects of leaving or transferring. Everything a public sector worker needs to know about their pension in 2026/27.

By Pension Bible Editorial·Last reviewed 4 July 2026·16 min read

What are public sector pensions?

If you work for the NHS, a school, a local authority, the civil service, the police, the fire service, or the armed forces, you almost certainly have access to a defined benefit (DB) pension scheme. These are fundamentally different from the defined contribution (DC) pensions that most private sector workers receive, and they are, by any reasonable measure, significantly more generous.

A defined benefit pension promises you a specific income in retirement, calculated from your salary and years of service. That income is guaranteed for life, no matter how long you live. It increases each year in line with inflation (CPI or Pensions Increase), so its purchasing power is protected. And the cost of providing it is overwhelmingly borne by your employer — the taxpayer — not by you.

The contrast with defined contribution pensions is stark. A DC pension is a savings pot: what you get out depends entirely on what goes in and how the investments perform. There is no guarantee, no inflation protection, and no promise of income for life unless you buy an annuity. A public sector DB pension eliminates all three of those risks.

This is not a small difference. An actuary would typically value a public sector DB pension at 25-35 times the annual pension income it provides. A nurse earning £35,000 per year who has built up a pension of £10,000 per year holds a benefit with a transfer value of roughly £250,000-£350,000. Most public sector workers dramatically underestimate what their pension is worth.

The big four public sector pension schemes

There are four main public sector pension schemes in the UK, each serving a different workforce. All four were reformed in 2015 (2014 for LGPS) to move from final salary to career average structures, but each has its own accrual rate, contribution tiers, and rules.

NHS Pension Scheme

The NHS Pension Scheme covers doctors, nurses, allied health professionals, and most NHS staff in England and Wales. It has evolved through three main iterations:

• 1995 Section — final salary, 1/80th accrual, normal pension age 60, plus an automatic tax-free lump sum of 3x pension. Now closed to new members.
• 2008 Section — final salary, 1/60th accrual, normal pension age 65, no automatic lump sum. Now closed to new members.
• 2015 Scheme — career average (CARE), 1/54th accrual, normal pension age equal to State Pension Age (currently rising from 66 to 67 between April 2026 and March 2028, with a further rise to 68 legislated for those born after 5 April 1977). All active members are now in this scheme following the McCloud remedy.

Employee contributions are tiered based on whole-time equivalent pensionable pay, ranging from 5.2% for the lowest band up to 12.5% on earnings above £67,669 (2026/27 thresholds). We have a dedicated NHS Pension Calculator that models all three sections, including the McCloud choice. You can also explore band-specific breakdowns like our Band 5 NHS pension page.

Teachers' Pension Scheme (TPS)

The Teachers' Pension Scheme covers teachers in state schools and many independent schools in England and Wales. Scotland has its own separate scheme (STPS).

• Pre-2007 arrangements — final salary, 1/80th accrual, normal pension age 60, plus automatic lump sum.
• 2007 arrangements — final salary, 1/60th accrual, normal pension age 65, no automatic lump sum.
• 2015 Scheme — career average (CARE), 1/57th accrual, normal pension age equal to State Pension Age.

Employee contributions range from 7.4% to 11.7% based on salary. The employer rate of 28.68% is the highest of the big four schemes, though most of this cost is invisible to the member. Our Teachers' Pension Calculator models all three arrangements with the McCloud transition built in.

Local Government Pension Scheme (LGPS)

The LGPS covers council workers, support staff in maintained schools, police civilian staff, and many other local authority employees. It is the largest DB scheme in the UK by total membership and, unusually among public sector schemes, is funded — meaning it holds actual invested assets rather than being paid from current taxation.

• Pre-2008 arrangements — final salary, 1/80th accrual, normal pension age 65, plus automatic lump sum of 3x pension.
• 2008-2014 arrangements — final salary, 1/60th accrual, normal pension age 65, no automatic lump sum.
• 2014 Scheme — career average (CARE), 1/49th accrual, normal pension age equal to State Pension Age. Note: LGPS reformed a year earlier than the other three schemes.

The LGPS has the most generous accrual rate of the big four at 1/49th. Employee contributions range from 5.5% to 12.5%. The scheme also has a unique 50/50 option allowing members to pay half contributions for half the pension build-up while retaining full life and ill-health cover. See our LGPS Calculator for detailed projections.

Civil Service Pension Scheme (alpha)

The Civil Service Pension Scheme covers civil servants across all government departments. The current scheme is called "alpha" (yes, lowercase).

• Classic — final salary, 1/80th accrual, normal pension age 60, plus automatic lump sum of 3x pension.
• Premium — final salary, 1/60th accrual, normal pension age 60, no automatic lump sum.
• Classic plus — hybrid of classic and premium.
• Nuvos — career average (CARE), 2.3% accrual (equivalent to 1/43.5), normal pension age 65.
• Alpha — career average (CARE), 2.32% accrual (equivalent to 1/43.1), normal pension age equal to State Pension Age.

Alpha is marginally the most generous of the big four schemes in terms of raw accrual rate, though the difference with LGPS is small. Employee contributions are between 4.6% and 8.05%, the lowest range of the four schemes. Employer contributions average around 27%. Our Civil Service Pension Calculator covers all five iterations.

Armed Forces Pension Scheme (AFPS)

The Armed Forces Pension Scheme sits outside the civilian "big four" above, with its own rules and its own Early Departure Payment structure. GOV.UK lists three main Armed Forces pension schemes: AFPS 15, AFPS 05 and AFPS 75. The current AFPS 15 scheme is a career-average scheme for post-1 April 2015 service, with each scheme year adding 1/47th of that year's pensionable earnings. Its normal pension age is 60 for those leaving at 60 or later; leave before age 60 and the pension is normally deferred to State Pension age, with possible reduced payment from age 55.

Use the Armed Forces Pension Calculator for an AFPS 15-only estimate. It deliberately does not model AFPS 75, AFPS 05, Reserve, Gurkha, Gibraltar, ill-health, commutation, added pension or 2015 Remedy cases. For official scheme detail, see GOV.UK's Armed Forces pension guidance and the MOD AFPS 15 booklet.

Final salary vs career average — what changed in 2015

The 2015 reforms (2014 for LGPS) were the most significant change to public sector pensions in a generation. They moved all four schemes from final salary to career average (CARE) structures. Understanding the difference matters, because most current public sector workers will have benefits in both types.

Final salary means your pension is calculated using your salary at or near retirement. If you earn £50,000 at retirement and have 20 years of service at a 1/60th accrual rate, your pension is £50,000 x 20/60 = £16,667 per year. The key advantage: every pay rise you receive retroactively increases the value of every year you've already worked. A promotion in your last year boosts your entire pension.

Career average means each year of service earns you a pension based on your salary in that specific year, revalued annually for inflation. If you earn £30,000 in year one, you build up £30,000/54 = £556 of annual pension for that year (using the NHS 1/54th rate). That £556 is then increased by CPI each year until retirement. In year two, if you earn £32,000, you build up another £32,000/54 = £593, and so on. Your final pension is the sum of all these revalued slices.

Career average pensions are generally less generous for workers who receive significant late-career pay rises — the classic pattern for senior doctors, headteachers, and senior civil servants. They are roughly neutral for workers whose pay rises broadly track inflation throughout their careers, which describes the majority of public sector staff.

The government's rationale for the switch was cost: final salary schemes create unpredictable liabilities because they are tied to future (unknown) salary growth. Career average schemes are cheaper and more predictable for the employer, because the liability is fixed at the point each year of service is earned.

The transition: If you were in service before 2015, you may have benefits in both a legacy (final salary) scheme and the reformed (career average) scheme. Your legacy benefits are protected — they will still be calculated on a final salary basis using your salary at the point you leave service or retire. Your post-2015 benefits will be calculated on a career average basis. At retirement, the two amounts are added together.

The McCloud remedy — the 2015 reform's unfinished business

The McCloud remedy is one of the most complex and consequential pension developments in recent UK history. If you were in a public sector pension scheme before and after the 2015 reforms, it directly affects you.

What happened: When the 2015 reforms were introduced, the government provided "transitional protection" to members who were closest to retirement. Those within 10 years of their Normal Pension Age on 1 April 2012 stayed in the old (more generous) scheme. Younger members were moved to the new scheme immediately or after a tapered transition period. In 2018, the Court of Appeal ruled in the McCloud and Sargeant cases that this age-based protection was unlawfully discriminatory.

The remedy: To fix the discrimination, the government decided that all members who were in service both before and after the reforms would get a choice at retirement. For the "remedy period" (1 April 2015 to 31 March 2022 for most schemes, or 1 April 2014 to 31 March 2022 for LGPS), affected members can choose whether their benefits for that period are calculated under the legacy rules or the reformed rules — whichever is more favourable.

Who is affected: You are in scope if you were an active member of a public sector pension scheme on or before 31 March 2012 AND were still in active service on or after 1 April 2015 (1 April 2014 for LGPS). If you joined after those dates, you are not affected.

The choice: For NHS, TPS, and Civil Service members, the choice is made at retirement. You (or your scheme administrator) will compare the pension calculated under legacy rules with the pension calculated under reformed rules for the remedy period, and take whichever is higher. In practice, the legacy scheme will usually be more generous for members who received significant pay rises during the remedy period, because legacy schemes used final salary calculations.

The LGPS difference: LGPS handles the remedy differently. Instead of a choice at retirement, the LGPS applies an "underpin" — it automatically calculates benefits under both the old and new rules and pays the higher amount. This happens automatically, without the member needing to make an active choice. However, LGPS members should still check their annual benefit statements to ensure the underpin has been correctly applied.

The McCloud remedy is being rolled out in phases, and scheme administrators are still working through the calculations for millions of members. If you think you are affected, check your annual benefit statement or contact your scheme administrator directly. The remedy cannot reduce your benefits — it can only maintain or increase them.

Accrual rates compared

The accrual rate determines how much pension you build up for each year of service. A higher accrual rate means more pension per year worked. Here is how the big four schemes compare across their various iterations:

The standout figures: alpha and nuvos have the highest raw accrual rates, followed by LGPS 2014 at 1/49th. However, raw accrual rates don't tell the whole story — the old 1/80th schemes included an automatic tax-free lump sum on top of the pension, which makes the total value closer to the 1/60th schemes than the headline rate suggests.

For the career average schemes, the revaluation rate matters too. NHS and Civil Service pensions are revalued by CPI + 1.5%. TPS is revalued by CPI. LGPS is revalued by CPI. The NHS and Civil Service therefore build value slightly faster during your working life, partially offsetting the lower accrual rate compared to LGPS.

When all factors are considered — accrual rate, revaluation, automatic lump sums, and employee contribution rates — the four post-reform schemes are broadly comparable in generosity, with LGPS and alpha having a slight edge in most scenarios.

Normal pension age — when you can claim without reduction

Normal pension age (NPA) is the age at which you can draw your full pension without any actuarial reduction. Drawing earlier means a permanent percentage reduction; drawing later may mean a small increase.

The shift to State Pension Age (SPA) as the NPA for all post-reform schemes was one of the most significant changes in the 2015 reforms. SPA is currently rising from 66 to 67 between April 2026 and March 2028, with a further rise to 68 legislated for those born after 5 April 1977 (timetable 2044–2046, currently under government review). This means a nurse who joined the NHS in 2020 has a normal pension age of 67 — seven years later than a colleague who was in the 1995 Section.

You can check your own State Pension Age using our State Pension Age Calculator.

Early retirement is possible in all schemes, typically from age 55 (rising to 57 from 6 April 2028 for benefits not already in payment). However, taking benefits early triggers an actuarial reduction — typically 3-5% per year of early drawing. On a pension of £20,000 per year, retiring three years early could reduce your income by £2,000-£3,000 per year for life. That is a permanent reduction, not a temporary one.

For members with benefits in both legacy and reformed schemes, each part has its own NPA. You could, in theory, draw your 1995 Section NHS benefits at 60 and leave your 2015 Scheme benefits accruing until 67. Scheme administrators can advise on the specifics.

Try the NHS Pension Calculator

The NHS Pension Scheme is the most searched of the four public sector schemes. Use the calculator below to model your projected pension across all three scheme sections, including the McCloud remedy choice.

For projections in the other public-sector schemes, use our dedicated calculators: Teachers' Pension Calculator, LGPS Calculator, Civil Service Pension Calculator, or Armed Forces Pension Calculator.

What changes if you opt out?

Opting out generally increases take-home pay because employee pension deductions stop, but it also stops new pension building and can change death-in-service and ill-health cover. Benefits already earned are dealt with under the scheme's leaving rules. Employer DB contributions fund the scheme's promises; they are not payments into a personal pot, and are not normally paid to you as salary if you opt out.

The trade-off depends on your pay, tax and scheme benefits. The LGPS in England and Wales offers a 50/50 section: half the normal contributions build half the normal pension, with full life and ill-health cover. Other schemes have their own arrangements. Payroll and your pension administrator can explain the options available to you.

Salary sacrifice is separate. Where an employer offers it, exchanging salary for an employer pension contribution can reduce National Insurance. Whether it is available for a particular payment, and how it affects pensionable pay or salary-linked benefits, depends on the arrangement. It is not a universal substitute for ordinary public-sector pension contributions. See the salary sacrifice guide.

Can you transfer out?

First check whether the scheme permits the proposed transfer. Main benefits in unfunded public-sector schemes, including NHS, Teachers' and Civil Service alpha, generally cannot be transferred into a defined contribution pension offering flexible benefits. Taking financial advice does not remove that restriction. Separate AVC pots and transfers between defined benefit schemes have different rules.

The LGPS is funded. Its transfer process can allow deferred benefits to move to a defined contribution arrangement, subject to the scheme's conditions and checks. If those LGPS benefits are worth more than £30,000, appropriate independent financial advice is required before that type of transfer. This is not a rule requiring advice for every DB-to-DB transfer.

Where a DB-to-DC transfer is permitted, it gives up the scheme's pension and associated benefits in exchange for a pot. Drawdown from that pot depends on investments, charges and withdrawals, and can run out. The FCA's general starting position is that most people are better off keeping a DB pension; an individual decision needs consideration of the actual benefits and circumstances. MoneyHelper explains the restrictions and trade-offs.

Additional pension purchases

All four schemes allow you to buy extra pension on top of what you earn through normal service. The mechanisms vary by scheme, but the principle is the same: you pay an additional contribution (either as a lump sum or through regular payroll deductions) and receive a specified amount of additional guaranteed pension at retirement.

NHS — Additional Pension (AP): You can buy up to £9,053 of additional pension per year in the 2015 Scheme (limit from 1 April 2026). The cost depends on your age — younger buyers pay less because the money has longer to grow. Purchases can be made via regular contributions or a lump sum. Additional Pension is built up in the 2015 Scheme and revalued by CPI + 1.5%.

TPS — Additional Pension: Similar to the NHS scheme. You can buy additional pension in multiples, up to a scheme-specific cap. The cost is age-dependent and purchases must be completed before your Normal Pension Age.

LGPS — Additional Pension Contributions (APCs): You can buy up to £9,054 of additional pension per year (2026/27 limit). Uniquely, the LGPS offers shared-cost APCs where the employer pays two-thirds of the cost — this typically applies when buying back "lost" pension from a period of reduced pay or absence. Shared-cost APCs are extraordinarily good value.

Civil Service — Added Pension: You can buy added pension through regular or lump sum payments. The maximum purchasable amount is set by scheme rules. The cost increases with age.

Additional pension purchases can be particularly good value for members approaching retirement who want to boost their guaranteed income. The cost is often comparable to or better than the equivalent annuity purchase on the open market, with the added benefit that the pension increases in line with inflation. However, the decision should be based on your personal circumstances and other retirement savings — it is not universally right for everyone.

Death benefits and survivor pensions

Public sector pension schemes provide significant death benefits that are often overlooked when assessing the total value of membership. These benefits are included in your pension at no additional cost — you do not pay extra for them.

Death in service: If you die while an active member, most schemes pay a lump sum of two to three times your pensionable pay to your nominated beneficiary. In the NHS 2015 Scheme, this is two times pensionable pay. In the LGPS 2014 Scheme, it is three times. This is effectively a free life insurance policy worth £70,000-£150,000 for a typical public sector salary, and it is one of the most underappreciated benefits of scheme membership.

Survivor's pension: All four schemes pay a pension to a surviving spouse, civil partner, or qualifying partner. The amount varies by scheme and iteration:

• Post-2015 schemes: Typically pay 37.5% of the member's pension to a surviving partner. Some schemes pay 50% for pre-2015 service.
• Legacy schemes: Typically pay 50% of the member's pension. The older 1/80th schemes (which already had lower accrual) often paid more generous survivor benefits.
• Children's pensions: All schemes pay pensions to eligible children, typically until age 23 if in full-time education.

The survivor's pension is payable for the rest of the surviving partner's life, and it increases with inflation just like the member's own pension. For a member with a pension of £20,000 per year, the survivor's pension could be worth £7,500-£10,000 per year for the partner's lifetime — a benefit with a capital value of potentially £150,000-£200,000.

Nominating your beneficiary: Make sure your death benefit nomination is up to date. Complete a nomination form through your scheme administrator. If your personal circumstances have changed — marriage, divorce, new partner — update the form. Many schemes now accept cohabiting partners as qualifying partners, but only if properly nominated.

Reducing pension fees elsewhere

Public sector DB pensions have no investment fees — the scheme bears all costs. But most public sector workers also have other pension savings: a partner's DC workplace pension, an old pot from a previous private sector job, or personal savings in a SIPP. For those pots, fees matter enormously. See our guide to pension fees for how to check what you are paying and whether it is reasonable.

If your employer offers salary sacrifice for a particular pension payment, its tax and NI treatment can differ from ordinary employee contributions. Check the effects on pensionable salary and other benefits. Our salary sacrifice guide explains the mechanism.

FAQ

How much is my public sector pension worth? A rough rule of thumb: multiply your expected annual pension by 25-35 to get an approximate capital value. A pension of £15,000 per year is worth approximately £375,000-£525,000 in capital terms. The exact figure depends on your age, scheme rules, and current gilt yields. Your scheme can provide a Cash Equivalent Transfer Value (CETV) on request.

Can I be in a public sector pension scheme and also contribute to a SIPP? Yes. There is no restriction on holding both a DB public sector pension and a DC personal pension or SIPP. However, your total pension contributions across all schemes count toward the Annual Allowance (currently £60,000 per year). For DB schemes, the "contribution" for Annual Allowance purposes is measured by the growth in your pension value, not your actual contributions — which can catch higher earners off guard. Our annual allowance resources can help you check.

What happens to my pension if I leave the public sector? If you meet your scheme’s qualifying conditions, benefits already earned can normally remain as a deferred pension. Short-service and transfer options depend on the scheme. Main unfunded public-sector benefits generally cannot move to a defined contribution pension offering flexible benefits; the funded LGPS has different rules. See the transfer section above.

I work part-time — do I still build up a full pension? Your pension builds up based on your actual pensionable pay, not your full-time equivalent salary. If you work 0.6 WTE, you build up 0.6 of the pension you would have earned at full-time. However, your accrual rate, contribution tier, and normal pension age are the same as a full-time colleague. Part-time service is not penalised — it simply reflects the lower pay.

What is the difference between CPI revaluation and Pensions Increase? During your working life, career average benefits are revalued each year (by CPI, or CPI + 1.5% in some schemes). Once in payment, all public sector pensions increase each year by Pensions Increase, which is based on the September CPI figure. The two are related but applied at different stages. Both protect your pension's purchasing power against inflation.

Am I affected by the McCloud remedy? You are affected if you were in active service in a public sector pension scheme on or before 31 March 2012 AND remained in service on or after 1 April 2015 (1 April 2014 for LGPS). If you joined after these dates, the remedy does not apply to you. If you are affected, your scheme administrator will contact you, but you can also check by logging into your scheme's online portal or calling them directly.

Where can I find official information about my scheme? Each scheme has a dedicated member website: NHS Pensions (nhsbsa.nhs.uk), Teachers' Pensions (teacherspensions.co.uk), LGPS Member (lgpsmember.org), and Civil Service Pensions (civilservicepensionscheme.org.uk). These sites publish scheme guides, contribution rates, benefit calculators, and contact details for your scheme administrator.

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Pension Bible is an editorial publication, not a financial adviser. The information in this guide is general guidance based on publicly available scheme rules and legislation. For personal recommendations about your specific pension, speak to an FCA-regulated financial adviser. You can find one through Unbiased or VouchedFor.

AVCs and additional scheme pension

Extra contribution arrangements differ across schemes. Read the AVC overview, or the LGPS England and Wales AVC/APC comparison for a checklist to discuss with your fund.

Current NHS pay and working hours

For England Agenda for Change basic-pay cases, compare two weekly working patterns with the NHS take-home-pay calculator. It separates current pension contributions, tax and NI; it does not calculate a retirement-benefit change or cover complex payroll.