Do I Have to Take My Teachers’ Pension at 60? Retirement Options Explained

Find out if you have to take your Teachers’ Pension at 60, when you can retire and how early or late retirement affects your pension amount.

Teachers in the UK are part of the Teachers’ Pension Scheme (TPS), which provides a defined benefit pension for those working in schools, colleges, and some universities. A common question for teachers approaching retirement is whether they must take their pension at 60, or if they have the flexibility to defer it.

The answer depends on which section of the Teachers’ Pension Scheme you are in. Over the years, the TPS has changed, meaning different retirement ages and options apply depending on when you started teaching.

Understanding Normal Pension Age (NPA) in the Teachers’ Pension Scheme

Your Normal Pension Age (NPA) is the age at which you can take your pension in full, without reductions. In the Teachers’ Pension Scheme, the NPA varies depending on when you joined and which scheme you are part of:

  • Final Salary 80th Scheme (Pre-2007) – Normal Pension Age is 60.

  • Final Salary 60th Scheme (Post-2007) – Normal Pension Age is 65.

  • Career Average Revalued Earnings (CARE) Scheme (2015) – Normal Pension Age is linked to your State Pension age, currently between 66 and 68, depending on your birth year.

If you were a member of both schemes, your pension may be split, with part of it having an NPA of 60 and the rest having an NPA of 65 or State Pension age.

Do You Have to Take Your Teachers’ Pension at 60?

You do not have to take your Teachers’ Pension at 60 unless you want to. You have several options:

  1. Take It at 60 – If your pension has an NPA of 60, you can claim it in full. If part of your pension has an NPA of 65 or State Pension age, that portion will be reduced if taken early.

  2. Defer Your Pension – If you don’t need the income immediately, you can delay taking your pension. Doing so increases your pension amount, as it will be actuarially enhanced for each year you defer.

  3. Take It Early (Before 60) – You can take your pension from age 55 (rising to 57 in 2028), but it will be reduced for early retirement.

  4. Take a Partial Pension – Some teachers choose to take part of their pension while continuing to work, known as phased retirement.

What Happens If You Delay Taking Your Pension?

If you defer your pension, the amount will increase each year you delay. The exact increase depends on the scheme’s actuarial adjustments, but in most cases, deferring means you receive a higher monthly pension when you do claim it.

However, deferring may not always be the best option if you need the income earlier or have other financial commitments. It’s important to weigh up the benefits of taking your pension early versus waiting for a larger payout.

What If You Take Your Pension Before 60?

If you take your pension before your Normal Pension Age, it will be reduced to reflect the fact that it will be paid for a longer period. The reduction rates depend on how early you take it.

For example, taking your Final Salary 80th Scheme pension at 58 instead of 60 may result in a 5-6% reduction per year. The reduction rates for the Career Average scheme depend on how many years early you take it, but they are broadly similar.

Can You Continue Working After Taking Your Pension?

Yes, teachers can continue working after taking their pension, but this may affect pension payments and taxation. If you return to teaching after retiring, you may be subject to abatement rules, which limit how much pension you can receive while earning a salary.

If you take phased retirement, you can reduce your working hours and take part of your pension while still earning a salary. This option allows for a more gradual transition into retirement.

Final Thoughts

You do not have to take your Teachers’ Pension at 60 unless you want to. The decision depends on your pension scheme, financial needs, and long-term retirement plans. You can take it early (with reductions), defer it (for increases), or phase into retirement gradually.

Before making a final decision, it’s advisable to check your pension statement, consider your financial situation, and seek advice from a financial planner or Teachers’ Pensions.