How the UK Teachers' Pension Scheme Works
The Teachers' Pension Scheme (TPS) promises every teacher in England and Wales a guaranteed income for life. This video explains how that promise actually works today, and how the formula behind it has been rebuilt twice.
It starts with the mechanism itself, then goes back to the scheme's 1898 origins and how final salary pensions were calculated for most of the twentieth century. It covers the unfunded, pay-as-you-go cost problem that built through the 2000s, Lord Hutton's March 2011 report recommending career average pensions across the public sector, and the 30 November 2011 strike by around two million public sector workers that followed. It explains the 2015 reform that moved most teachers onto a career-average scheme accruing 1/57th of salary a year — and the transitional protection for older members that a later court ruling found unlawfully discriminated by age (the McCloud/Sargeant case).
It then covers the McCloud remedy: the Public Service Pensions and Judicial Offices Act 2022, the October 2023 implementation, and the deferred choice underpin that lets affected teachers choose legacy or reformed scheme benefits for their 2015-2022 service — plus the backlog of corrected benefit statements still being worked through, with a statutory deadline extended to 31 August 2026.
Finally it covers what teachers and employers pay today: member contributions tiered from 7.4% to 12% of salary from April 2026, and an employer rate of 28.6% that the 2024 actuarial valuation has set to fall to 17.6% from April 2027 — and what that swing could mean for school funding and pay talks.
Every figure is on screen with its source and date.
In these topics
Tags
Chapters
Sources and credits
Photo credits (Wikimedia Commons)
- John Hutton (Lord Hutton of Furness), author of the 2011 Independent Public Service Pensions Commission report: US Department of Defense, Public domain - https://commons.wikimedia.org/wiki/File%3AJohn_Hutton.jpg
- English state school pupils during the mid-20th-century final-salary era of the scheme: Ministry of Information Photo Division Photographer, Public domain - https://commons.wikimedia.org/wiki/File%3AGirls_at_Baldock_County_Council_School_in_Hertfordshire_enjoy_a_drink_of_milk_during_a_break_in_the_school_day_in_1944._D20552.jpg
- Middlesex Guildhall, home of the UK Supreme Court, which declined to hear a further appeal in the McCloud age-discrimination case: Arpingstone, Public domain - https://commons.wikimedia.org/wiki/File%3AMiddlesex.guildhall.london.arp.jpg
- Palace of Westminster, seat of the Parliament that passed the Public Service Pensions and Judicial Offices Act 2022 implementing the McCloud remedy: CubicPioneer, CC0 - https://commons.wikimedia.org/wiki/File%3AElizabeth_Tower_and_Palace_of_Westminster_from_the_River_Thames.jpg
- Contemporary UK school classroom, for the closing chapter on what the scheme means for working teachers today: Mertbiol, CC0 - https://commons.wikimedia.org/wiki/File%3AFirst-floor_classroom%2C_Prior%27s_Field_School%2C_Surrey_-_September_2025.jpg
Primary sources
- Government Actuary's Department, 'Teachers' Pension Scheme (England and Wales) 2024 Actuarial Valuation Results' and 'Summary', published 1 July 2026 - employer contribution rate 17.6% (17.68% with the administration levy) from 1 April 2027, an 11.0 percentage-point cut from the 28.6% rate set at the 2020 valuation.
- Independent Public Service Pensions Commission, Final Report (the Hutton Report), 10 March 2011, HM Treasury/gov.uk - the recommendation to replace final salary with career average schemes, and the foreword's 'balanced deal' quotation.
- House of Commons Library, Teachers' Pension Scheme briefing CBP-10179, and Teachers' Pensions (scheme administrator) scheme guide, Active Member Guide (August 2026 edition) and Tiered Contributions Member Factsheet (March 2026 edition), teacherspensions.co.uk - the 1/57th accrual rate, CPI+1.6% revaluation, and the six member contribution tiers from 7.4% to 12% effective 1 April 2026.
- UK Parliament, Historic Hansard / api.parliament.uk, and education-uk.org act texts - the Elementary School Teachers Superannuation Act 1898 and the School Teachers Superannuation Act 1918.
- Court of Appeal judgment [2018] EWCA Civ 2844 (McCloud v Ministry of Justice; Sargeant v London Fire and Emergency Planning Authority), 20 December 2018, and the Supreme Court's refusal of permission to appeal, 27 June 2019.
- Public Service Pensions and Judicial Offices Act 2022 and Teachers' Pensions McCloud remedy guidance, teacherspensions.co.uk - the 1 October 2023 implementation date, the 2015-2022 remedy period, and the deferred choice underpin mechanism.
- Statutory guidance on McCloud-related Annual Benefit Statement corrections, as applied across public service pension schemes (Leicestershire Local Pension Committee McCloud Remedy Report, 30 May 2025; Scottish Public Pensions Agency correspondence, 2026) - the 31 August 2026 maximum-extension deadline.
- Southwark Teacher Pension Newsletter, June 2026 edition, reproducing Teachers' Pensions' own update - 'the transfer of Teachers' Pensions administration services from Capita to Tata Consultancy Services (TCS) will now take place in late 2026'; Schools Week/FE Week reporting (multiple dates, August 2025-March 2026) on the handover's delays, and the GBP233 million, 10-year TCS contract.
- Barnett Waddingham and HCR Law briefings on the SCAPE discount rate consultation/announcement - context for the 2020-valuation employer rate rise from 23.6% to 28.6%.
Not regulated financial advice.