Teachers' Pensions

Paying into the Teachers’ Pension Scheme means:

Meet Anika, she’s 25 and has been teaching
for just under two years and earns £26,000 a year.

Anika decides to pay into the
Teachers’ Pension Scheme

With an annual salary of £26,000 she’ll contribute 7.4% of her monthly income, that’s around £160 a month. This money is taken automatically from her salary, before tax, so she doesn’t have to do anything.

Now £160 may seem like a lot, but it means she’s estimated to get a pension of £29,000 a year, (based on today’s prices) when she retires.

She could also choose to take up to 25% of the value of her pension as a tax-free cash lump-sum, around £124,000, and still get an annual pension of approximately £18,600*. Not to mention death benefits for her family and then her State Pension as well.

Anika has the option of retiring before her Normal Pension Age, if she wants to. Although this will result in a reduction in her benefits, as her pension is being paid out for longer, she’ll still receive an income for life and all the other benefits her pension offers. She could also pay in more now to offset the reduction should she decide to retire before her Normal Pension Age.

*The examples used are for illustration purposes only. Your final pension is dependent on a number of factors. For more information please visit the Teachers’ Pensions website. 

Anika decides to leave the Teachers’
Pension Scheme

She decides to leave the Scheme before her two year anniversary is complete and therefore won’t qualify for benefits. As she now won’t get a pension from the Scheme she’ll need to look for other ways to save.

She chooses to save a little money every month into a savings account. This goes into the account irregularly, as she sometimes decides the money is better spent elsewhere. Her savings aren’t locked away either, which means she can dip in and use them for anything she likes.

To ensure that her savings grow she may have to rely on the uncertainty of investing in the stock market to make larger gains. Income gained from the investments are taxable, plus the money she pays in will be from her net monthly salary (whereas contributions to the Teachers’ Pension Scheme are from gross salary, meaning she’d pay less in tax and National Insurance contributions).

When she decides to stop working she only has a State Pension of £159.55 a week (at today’s rates) to live on. The latest research suggests that the average household currently spends £528.90 per week*.
  • Budget planner

    We understand balancing your income and outgoings can be tricky so why not use the Money Advice Service budget planner to make sure you can enjoy yourself now and when you stop working.

    Budget planner

  • What does retirement mean to you?

    Find out what others think about saving for a pension by watching our short video.

    What does retirement mean to you?

  • Paying in

    How much will you have to pay to ensure you have an income for life and just what are the benefits of paying into the Scheme?

    Paying in

  • My Pension Online (MPO)

    Don’t forget to keep up to date with your teacher’s pension and use MPO to keep track of what you’ve built up already to ensure you’re saving enough for later in life.

    My Pension Online (MPO)

  • Calculators

    Calculate what you might receive, you can even get an estimate of what you’d get if you retired early from the Scheme.


  • Will your teacher’s pension be big enough?

    What are the important questions you should be asking to make sure you’re prepared for life when you do stop working?

    Will your teacher’s pension be big enough?

  • Could you build up a bigger teacher’s pension?

    It’s a question worth asking, saving more now could mean an even better lifestyle in the future or even a better pension if you retire earlier. You’ve a number of options available.

    Could you build up a bigger teacher’s pension?