Pensions news and updates

Salary bands for Teachers’ Pension Scheme Employee Contributions

From 1 April 2023, the contribution bands for employee pension contributions to the Teachers’ Pension Scheme are rising by 10.1 per cent. This is in line with the September 2022 increase in the Consumer Prices Index (CPI).

This increase only affects the contribution bands. The contribution rates remain the same. The contribution structure is based on the teacher’s actual salary rather than the full-time equivalent salary.

The tiered contribution rates for the TPS from 1 April 2023 are as follows:

Indexation of TPS Career Average Pensions April 2023

The Government has confirmed that career average pension rights for members in teaching will be increased by 11.7 per cent in April 2023.

Members with deferred pensions will have their career average pension rights increased by 10.1 per cent in April 2023.

All teachers are now accruing pension in the career average section of the Teachers’ Pension Scheme. Your pension is being built up at 1/57 of your pensionable earnings each year. These pension rights are then increased each year until retirement at CPI inflation + 1.6 per cent for teachers who stay in teaching, and at CPI inflation only for those who leave the Teachers’ Pension Scheme.

The increase is based on the CPI figure from September 2022, which was 10.1 per cent.

Pensions increase payable from 10 April 2023

The Government has published the proposed increases in teachers’ pensions with effect from 10 April 2023. This follows confirmation by HM Treasury of the Consumer Prices Index inflation figure for September 2022. The same proposed increases apply to local government pensions.

Those pensioners whose pensions began on or before 25 April 2022 will receive an increase of 10.1 per cent, in line with the increase in the Consumer Prices Index.

This is a smaller increase than the 12.6 per cent which would have been payable had the previous indexation link to the Retail Prices Index still been in operation.

Those pensioners who have retired on or after 26 April 2022 will receive a proportionate increase based on CPI. The following table shows the pensions increases payable. It should be noted that the dates shown are the dates the pension begins and not the date of retirement.