Question 1

What are the three Teachers' Pension Scheme sections?

Accepted Answer

The Teachers' Pension Scheme (TPS) has three sections: the pre-2007 scheme (final salary, 1/80 accrual, normal pension age 60, with an automatic 3/80 lump sum); the 2007 scheme (final salary, 1/60 accrual, normal pension age 65); and the 2015 scheme (career average revalued earnings, 1/57 accrual, normal pension age equal to state pension age). Most current teachers are in the 2015 scheme. Anyone who joined teaching before April 2015 may have benefits in one or more of the legacy schemes.

Question 2

How is the TPS 2015 CARE scheme calculated?

Accepted Answer

The 2015 scheme is a Career Average Revalued Earnings (CARE) scheme. Each year you accrue 1/57 of your pensionable pay for that year. Each year's accrual is then revalued annually by CPI + 1.6% while you remain an active member (and by CPI alone once you leave service). Your final pension is the sum of all your revalued accruals. So if you earn £30,000 in year one, you accrue £526.32 of annual pension that then grows by CPI + 1.6% each subsequent year you stay in the scheme.

Question 3

What is the McCloud remedy and how does it affect teachers?

Accepted Answer

The McCloud judgement (2018) ruled that the 2015 public service pension reforms — including the move from the Teachers' Pension legacy schemes to the 2015 CARE scheme — unlawfully discriminated against younger members. As a remedy under the Public Service Pensions and Judicial Offices Act 2022, anyone who was an active TPS member on both 31 March 2012 and 1 April 2015 has a one-time choice at retirement about whether to be treated as being in their legacy scheme (pre-2007 or 2007) or the 2015 scheme for the period 1 April 2015 to 31 March 2022. Teachers' Pensions will give you both sets of figures at retirement; the right choice depends on your full service history and tax position.

Question 4

Should I transfer my Teachers' Pension out to a SIPP?

Accepted Answer

Almost certainly not. The Teachers' Pension Scheme is one of the most generous defined benefit schemes in the UK — fully government-backed, inflation-linked, with substantial employer contributions, ill health cover and survivor benefits. Transferring out means giving up a guaranteed income for life in exchange for a pot of money you have to manage yourself, with no guarantees and exposure to investment risk and longevity risk. UK regulators presume that DB-to-DC transfers are not in members' best interests. Transfers above £30,000 legally require advice from a regulated pension transfer specialist. We do not provide transfer advice.

Question 5

Can I take my TPS pension early?

Accepted Answer

Yes — TPS members can take their pension from the minimum pension age (currently 55, rising to 57 in April 2028) but it will be actuarially reduced for early payment. The reduction is roughly 5% for each year you take it before your scheme's normal pension age, though the real Teachers' Pensions tables vary by age and scheme. Teachers' Pensions also offers phased retirement, which lets eligible members reduce their pensionable salary by at least 20% and draw part of their pension while continuing to teach and accrue further benefits. Phased retirement is a flexible alternative to full early retirement and worth investigating directly with Teachers' Pensions.

How much will your Teachers' Pension be worth?