Project your Teachers' Pension Scheme (TPS) career average (1/57th) pension, 2026/27 contribution tiers and the maximum tax-free lump sum you can take.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Projected Annual Pension at Retirement
£39,008.54
£3,250.71/month
This Year's Accrual
£701.75/yr
Contribution Rate
8.9%
Monthly Contribution
£296.67
Max Tax-Free Lump Sum (optional)
£167,179.47
Pension If You Take the Max Lump Sum
£25,076.92/yr
Career average scheme: 1/57th of pensionable salary accrued each year, revalued annually by CPI + 1.6% (5.4% in April 2026); this projection assumes 3.2% a year. Normal pension age is linked to State Pension age. There is no automatic lump sum: you can give up £1 of pension for every £12 of lump sum, up to 25% of the total value of your benefits. All service is treated as career average at your current salary, so final salary service before April 2015 (1/80th plus an automatic lump sum, or 1/60th) is not modelled separately. This is a simplified projection.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC, GOV.UK and The Pensions Regulator and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
The Teachers' Pension Scheme is a defined benefit arrangement built on career average revalued earnings, which has covered service since April 2015. Each year of service adds 1/57th of that year's pensionable pay to your entitlement, and every slice is revalued each April by CPI plus 1.6% until you retire, so the early years hold their real value instead of fading away. A teacher with 35 years and a career average of £50,000 finishes with 35/57ths of that figure, which comes to £30,702 a year.
Member contributions are tiered by salary band. For 2026/27 they run at 7.4% up to £36,198.99, 8.9% from £36,199 to £48,727, 9.9% from £48,728 to £57,776, 10.5% from £57,777 to £76,572, 11.6% from £76,573 to £104,413, and 12% above £104,414. In cash terms a teacher on the M1 point of £34,069 pays £2,521 a year, while one on M6 at £46,940 pays £4,178. Employers contribute 28.68% of pensionable pay, a figure that includes the 0.08% administration levy, and contributions from both sides attract tax relief.
That employer rate is the part teachers most often overlook. At 28.68% of salary, funded by the school or the DfE, it dwarfs the 5 to 8% typical of private sector employers and is worth the equivalent of a 25% pay rise or better. It is the single biggest financial advantage of teaching in the UK, which is why comparing a teaching salary against a private sector offer on gross pay alone gives a misleading answer.
Service before April 2015 sits in the older final salary scheme, where the pension rests on your salary near retirement. Teachers who joined before 1 January 2007 built up 1/80th a year with a Normal Pension Age of 60, plus an automatic lump sum of three times the pension. Those who joined from 1 January 2007 built up 1/60th a year with a Normal Pension Age of 65 and no automatic lump sum. This calculator treats all service as career average, so it does not value final salary years separately. Many teachers therefore hold a hybrid record, with final salary benefits preserved and everything since 2015 building up in the career average scheme. Transitional protection allowed teachers within 10 years of normal pension age in 2012 to stay in final salary, an arrangement the McCloud judgment of 2018 found discriminatory, with the remedy working through between 2024 and 2026.
Normal Pension Age is tied to State Pension Age, currently 67 and rising to 68, and the pension is CPI-linked once in payment. You can retire early from 55, rising to 57 from April 2028, at an actuarial reduction of 3 to 5% for each year taken early, or take phased retirement by drawing part of the pension while working part-time. Ill-health retirement pays the full pension with no reduction where you are permanently unable to teach. Death in service pays a lump sum of three times pensionable salary, and a surviving spouse receives 37.5% of the teacher's pension.
The career average scheme pays no automatic lump sum, though you can commute pension for cash at £12 of lump sum for every £1 of annual pension surrendered, up to 25% of the total value of your benefits. With no automatic lump sum, that cap works out at 30/7 of the pension, about 4.29 times it. As for what the projection tends to show, a teacher with 25 years and an M6 career average of £43k is looking at roughly £18,860 a year, while 35 years ending in headship on a £60,000 average points to about £36,840, both before the State Pension is added. Taking the maximum lump sum from the first would give about £80,830 in cash and leave £12,124 a year.
Example: Teacher earning £40,000, 20 years' service
- Annual accrual: £40,000 ÷ 57 = £701.75
- 20 years simplified (no revaluation): 20 × £701.75 = £14,035/year pension
- With CPI+1.6% revaluation on earlier accruals, actual pension higher
- Approximate monthly pension before tax: £1,170
- Optional maximum lump sum: £14,035.09 × 30/7 = £60,150.38, which reduces the pension by £60,150.38 ÷ 12 = £5,012.53 to £9,022.56 a year
Frequently Asked Questions
- How is the Teachers' Pension calculated?
- Under the 2015 career average scheme you earn 1/57th of your pensionable salary each year as pension, and that amount is then revalued annually by CPI plus 1.6% until you retire. A year on £40,000 therefore adds £701.75 to your annual pension, and that slice keeps growing with inflation plus 1.6% every year afterwards, which is what stops early service losing its value over a long career.
- What are the Teachers' Pension contribution rates for 2026/27?
- Member rates for 2026/27 are 7.4% up to £36,198.99, 8.9% from £36,199 to £48,727, 9.9% from £48,728 to £57,776, 10.5% from £57,777 to £76,572, 11.6% from £76,573 to £104,413, and 12% above £104,414. Employers pay 28.68%, which includes the 0.08% administration levy. All contributions attract income tax relief, so the net cost to you is lower than the headline percentage suggests.
- When can I access my Teachers' Pension?
- Normal Pension Age for the 2015 career average scheme is linked to State Pension Age, currently 67 and rising to 68 from 2044. You can take the pension earlier with an actuarial reduction, or later with an enhancement, and it is CPI-linked once it starts. Ill-health retirement is paid in full with no reduction where you are permanently unable to teach.
- Does the Teachers' Pension pay a tax-free lump sum?
- Not automatically in the career average scheme. You can create one by commuting pension for cash at a rate of £12 of lump sum for every £1 of annual pension given up, up to 25% of the total value of your benefits, which is 30/7 of the pension. On a £14,035 pension that means a lump sum of up to £60,150, leaving £9,023 a year. Final salary service works differently: teachers who joined before 1 January 2007 built up an automatic lump sum of three times the pension alongside 1/80th a year, while those who joined later accrued 1/60th a year with no automatic lump sum.