Letter from the Founder: What’s Happening with The Teachers’ Pension Scheme?

I posted a video about the Teachers’ Pension Scheme recently, and the comments were fascinating. I have been thinking about them ever since, because I think they reveal something important, and it is not what most of the commenters intended.

Let me start with what I said. The TPS is a defined benefit, career average pension. Every year you teach, you bank 1/57th of your earnings that year as guaranteed, index-linked retirement income. Your school puts in 28.68% of your salary. You contribute somewhere between 7.4% and 11.7%.

On a salary of £42,000, that is over £15,000 going into the scheme each year, none of which appears on your payslip. Over a thirty-year full-time career, you could be looking at roughly £22,000 a year for life, guaranteed, rising with inflation every year until you die. I said it was one of the best pension arrangements available to anyone in this country.
I still think that. And here is why the pushback, though understandable, does not change my view.

Several teachers wrote in to say that their pensions were much smaller than I described, because they had worked part-time for portions of their career. A teacher called rach_combo7 wrote: “I have worked as a teacher for 31 years, but part-time and my pension is not good at all. Lots of female teachers are part-time, and our pensions are severely affected.”

I understand the frustration in that comment. But I think it is aimed at the wrong target.

The TPS accrues based on actual earnings, not full-time equivalent salary. That is also exactly how a private sector pension works. A woman who spends ten years working part-time at a law firm, a bank, or a marketing agency will also end up with a smaller pension than her full-time colleagues.

That is not a flaw in her pension scheme. It is what happens when you earn less, for fewer hours worked, over fewer years. The gender pension gap is one of the most significant financial inequalities in this country, but it is not a teachers’ pension problem.

The more important question is: compared to what? A part-time teacher who has spent twenty years in the TPS still has a guaranteed, inflation-linked income waiting for her in retirement. It will not be as large as a full-time teacher’s pension. It will almost certainly be larger and more secure than the pension of a private sector worker with an equivalent part-time employment history.

That guarantee has real monetary value that is very easy to underestimate when you are looking at a number that feels smaller than you hoped.
There is one criticism of the scheme that I think does land, and it is worth being straight about.

The normal pension age is now tied to the State Pension age. For anyone currently aged 48 or under, that means 68. That is a scheme-specific decision, not a universal feature of employment, and for a profession with the physical and emotional demands of teaching, it is a legitimate concern. Asking whether working full-tilt in a classroom until 68 is realistic is a fair question, which I do not have a reassuring answer to.

I also want to flag something practical that came up in several comments: errors on TPS records. The scheme is currently transitioning its administration from Capita to Tata Consultancy Services, expected in late 2026, and the NEU has flagged ongoing record problems for teachers with fragmented service across multiple employers. If you are a teacher reading this, please log into your My Pension Online account and check your service history and salary figures. Errors are far easier to correct now than at the point of retirement.

The TPS remains, in my view, one of the most valuable workplace benefits in the UK. That is true for full-time teachers, and it is true, on a proportionate basis, for part-time ones.

The frustration I read in those comments is real, but I think it reflects something broader: the fact that women in this country still routinely reach retirement with less money than men, across every sector and every scheme, because of the way the labour market treats the years they spend raising children. That is the problem worth being angry about.

The TPS is not the cause of it. In many cases, it is the thing cushioning the impact.

As always, this is analysis, not personal financial advice. If you are a teacher thinking about your retirement options, speaking to an independent financial adviser with specific knowledge of the TPS is worth your time.