Teachers Pension

Teachers' Pension: What You Pay vs What You Get

By PensionCalc Team | | Updated: 14 November 2025

Use our pension calculator to estimate your retirement income.

Let’s be honest: teaching is hard work. The planning, the marking, the behaviour management, the endless emails. The pension probably isn’t why you got into this job.

But here’s the thing - that pension might be one of the best financial benefits you’ll ever have access to. And most teachers we talk to have no idea how good it actually is.

Let’s fix that.

Use our Teachers’ Pension Calculator to see what your pension could be worth.

The basics: How your pension builds up

Every year you teach, you’re earning a slice of guaranteed retirement income. Here’s how it works:

Take your salary → Divide by 57 → That’s your pension for that year

So if you earn £35,000:

  • £35,000 ÷ 57 = £614 per year added to your pension

Work for 35 years at that salary, and you’re looking at £21,490 per year in retirement. For life.

But wait - it’s actually better than that.

Your pension grows every year

Those pension “slices” don’t just sit there. While you’re still teaching, they grow by CPI inflation plus 1.6% each year.

Let’s say inflation is 2%. Your pension slices grow by 3.6% annually. Over a 35-year career, that makes a significant difference.

Plus, of course, your salary probably increases over time too. Higher salary = bigger pension slices.

Building your pension

What you actually pay

Here’s the bit that stings on payday. Your contributions depend on your salary:

Your salaryYou pay
Up to £32,1357.4%
£32,136 - £43,2598.6%
£43,260 - £53,5509.6%
£53,551 - £67,41010.2%
£67,411 - £85,29211.3%
Over £85,29211.7%

On a £35,000 salary, you’re paying about £2,590 per year. That’s roughly £216/month coming out of your pay packet.

Feels like a lot? Keep reading.

Here’s the bit most teachers miss

While you’re putting in 7-11% of your salary, your employer is adding 23.68%.

Yes, you read that right. Nearly 24% of your salary is being added to your pension pot by your employer.

Let’s put that in pounds:

  • Your contribution (£35k salary): ~£2,590/year
  • Employer contribution: ~£8,288/year
  • Total going toward your pension: ~£10,878/year

For every £1 you put in, your employer adds about £3.20. Where else do you get that kind of return?

What’s your pension actually worth?

This is where it gets interesting. Let’s look at a typical teacher:

Emma, secondary school teacher:

  • Starts teaching at 25, retires at 67
  • Average career salary: £42,000
  • 42 years in the scheme

Emma’s pension at 67:

  • Annual pension: approximately £31,000 per year for life
  • Plus State Pension: ~£11,500/year
  • Total retirement income: ~£42,500/year

What Emma paid in total: ~£130,000 over her career

What she’d need in a private pension pot to buy the same income: Roughly £600,000-700,000

That’s the power of a defined benefit pension with massive employer contributions.

Understanding your benefits

The tax relief you probably don’t think about

Here’s another bonus: your pension contributions come out before tax.

If you earn £40,000 and pay £3,440 in pension contributions (8.6%), that’s not really costing you £3,440. Because you’re not paying tax on that money, the real cost is more like:

  • Basic rate taxpayer: ~£2,750 actual cost
  • Higher rate taxpayer: ~£2,060 actual cost

The government is effectively subsidising your pension. Don’t leave free money on the table.

What if you can’t wait until 67?

The standard retirement age for the Teachers’ Pension is linked to your State Pension Age - 67 for most people, 68 for younger teachers.

But you can take your pension from age 55 (57 from 2028). You’ll face a reduction for every year you retire early, but it’s an option.

Rough guide to early retirement reductions:

  • 5 years early: ~20% reduction
  • 10 years early: ~35% reduction

Whether that’s worth it depends on your circumstances. We’ve written a detailed guide on early retirement decisions that covers the same principles (the maths is very similar).

If something happens to you

Not a fun topic, but important. The Teachers’ Pension includes significant protection for your family:

If you die while teaching:

  • Your family gets a lump sum of 3x your annual salary
  • Your spouse/civil partner gets a survivor’s pension
  • Children get pensions until age 23 (if in education)

If you die after retiring:

  • Your surviving partner gets a pension for life

To buy equivalent life insurance privately would cost hundreds of pounds a year. It’s included automatically with your pension.

Can’t keep teaching? Ill health retirement

Teaching can take a toll on your health. If you become too ill to continue, there are provisions:

Tier 1: You can’t do your job anymore, but could do other work

  • You get your pension based on what you’ve built up so far

Tier 2: You can’t do any work at all

  • Enhanced pension as if you’d worked until retirement

This is a genuine safety net. Private pensions don’t typically offer anything like this.

Phased retirement: The best of both worlds

Here’s something many teachers don’t know about: you can take some of your pension while continuing to work.

How it works:

  • Reduce your hours (by at least 20%)
  • Start receiving part of your pension
  • Keep building up more pension on your reduced hours

This can be a great way to ease into retirement, especially if you’re finding full-time teaching too demanding but aren’t ready to stop completely.

You can do this up to twice before fully retiring.

Flexible retirement options

The things to watch out for

The Teachers’ Pension is excellent, but there are a few things to be aware of:

Part-time and supply teachers: You still get the pension, but it’s based on actual earnings. Make sure you’re opted in.

Career breaks: You stop building up pension when you’re not working. Consider whether keeping contributions going makes sense.

Annual Allowance: If your pension grows by more than £60,000 in a year (unlikely for most teachers, but possible for heads), you could face a tax charge.

Leaving teaching: Your pension stays with you but stops growing with the active member bonus. It’s preserved and will still be there at retirement.

The bottom line

The Teachers’ Pension Scheme is, quite frankly, brilliant. You’d struggle to find better value anywhere:

  • Employer contributes nearly 24% of your salary
  • Guaranteed income for life (no investment risk)
  • Inflation protection built in
  • Generous death benefits
  • Ill health protection

Yes, the contributions can sting - especially early in your career when money’s tight. But you’re paying for something genuinely valuable.

For context: to match what the Teachers’ Pension gives you, you’d need to save about 35% of your salary every year in a private pension. And you’d still have investment risk.

What to do next

  1. Check your pension statement - Log into My Pension Online to see what you’ve built up
  2. Use our Teachers’ Pension Calculator to model different scenarios
  3. Consider your options - Part-time? Phased retirement? Plan ahead