The amount you pay depends on how much you earn. The current rates from 1 April 2018 are shown in the table below. These rates are before tax relief and as your contributions are deducted from your pay before tax is applied the real cost to you will be less than this. If you work part-time you will only make contributions based on your part-time pay. Your employer also pays into the scheme on your behalf.
|Actual pensionable pay||Contributions from 1 April 2018
(% of pensionable salary)
|Up to and including £27,047||7.2%|
|£27,048 to £36,410||8.7%|
|£36,411 to £43,172||9.7%|
|£43,173 to £57,216||10.4%|
|£57,217 to £78,022||11.5%|
|£78,023 and above||11.9%|
You can pay more and increase your benefits by up to £6,500. There are three ways to do this:
You can do a combination of all three - details are given below and factsheets are available. We will continue to update this website but in the meantime, if the factsheet you require is not available here, please contact SPPA.
For more information please see our video on pay and contributions.Watch the video
If you work part-time your contributions will be worked out using your actual pensionable pay.
If we take two members and assume Gillian works part-time and earns £20,000 a year while Scott works full-time and earns £40,000 a year.
Gillian's part-time earnings falls within the first payband and so she will pay 7.2%.
Scott's earnings fall within the third pay band (£35,350 - £41,914) and so he will pay 9.7%.
If you hold two posts which equate to a full time post, each contract is treated as an individual employment.
For example, Margaret is employed by the same employer on a 0.6 contract (Employment 1) earning an actual annual salary of £20,932.20 and a 0.4 contract (Employment 2) earning £13,954.80 which together total £34,887.00 a year.
The contribution rates are as follows:
Employment 1 Where Margaret is employed on a 0.6 contract earning £20,932.20 the contribution rate falls within the first salary band (up to and including £26,259). She will therefore pay 7.2% on this element of her pay.
Employment 2 Where Margaret is employed on a 0.4 contract earning £13,954.80, this also falls into the first salary band so in this example she will also pay 7.2% on these earnings.
Some scheme members have fluctuating pay throughout the year and so to set the appropriate contribution rate their monthly pay is multiplied by 12. This annual amount is then used to determine the relevant tier and rate due.
For example, Fiona’s monthly pay is £2,250. Therefore in this example £2,250 x 12 = £27,000. The appropriate contribution tier for the actual annual pay of £27,000 is “£26,260 to £35,349” therefore Fiona's contribution rate is 8.7%.
For example, Andrew has a part-time contract earning £26,500 a year and in addition works supply with the same employer earning £800 in a month. The member contribution tier for the part-time contract is £26,260 to £35,349 therefore the standard contribution rate due to be applied is 8.7%.
The supply earnings will be converted to an actual annual pay. In this example £800 x 12 = £9,600. The contribution tier for the actual annual pay of £9,600 falls within the first pay band (earnings up to and including £26,259) with the standard rate to be applied of 7.2%.
Andrew would therefore pay different contribution rates on each employment.
You can buy additonal pension in multiples of £250 and choose to pay either regular amounts or a single lump sum payment.
When making your election, you will be asked to decide whether you are increasing just your own pension or whether you would like the additional pension to apply to any dependant's pension payable in the event of your death.
To find out more, please download our factsheet. You can also download a form to request a quotation.
Additional Voluntary Contributions (AVCs) with Prudential
A Teachers’ AVC is a separate pension pot that you can build up in addition to your teachers’ pension to potentially provide you with extra retirement benefits. Prudential are the official provider of Teachers’ AVCs to the Scottish Teachers’ Pension Scheme.
You can take the money you have built up in your AVC pot from age 55 - either before, at the same time as, or after you take your teachers’ pension. You choose to make tax-efficient contributions directly from your salary and you stay in control of your contributions to make sure they suit your needs.
A Teachers’ AVC is investment based (like most pensions) so the value can go down and well as up and you may not get back the amount you put in.
You decide where your contributions are invested to suit your needs and circumstances - whether you seek investment growth potential or just want to try to maintain the value of your contributions.
When you decide you want to take your money from your Teachers’ AVC you can choose from a wider range of cash and income options than ever before.
Prudential have created a website for you based on feedback from members of the Teachers’ Pension scheme. It aims to educate and inform you with engaging and useful content about how you can improve your pension benefits by making Teachers’ Additional Voluntary Contributions.
The website has:
Concise, easy to understand content.
New range of case studies – for both new members and members wanting to increase.
Two new calculators – one for new members, one for existing members.
Guidance and clear signposting throughout the site - helping you find the most relevant information to you quickly.
Improved online application forms.
Go online now at www.pru.co.uk/teachers and make the most of this new site!
Alternatively speak to a Retirement Specialist on 0800 151 3665.
For general information about your existing Teachers AVC , contact the Servicing Team on 0345 6000 343.
Free Standing Additional Voluntary Contributions (FSAVCs)
There are a number of other insurance companies that offer a FSAVC scheme. You can choose to pay your AVCs into a personal pension policy with any company of your choice. You can get more details direct from companies offering this kind of arrangement.
You will earn a pension at a rate of 1/57 of your pensionable pay in each year. Subject to certain conditions, you can elect to earn pension at a faster rate than this by paying extra monthly contributions. You can choose from three rates depending on your budget and how quickly you would like your pension to grow:
You must select this option in the financial year before the financial year you wish it to be effective from.
If you are a new entrant then you must make your election within one month of joining the scheme.
You can take your benefits in full when you reach your State Pension age. You can retire before then but your pension will be reduced for early payment. If you’re sure you wish to retire at 65 you can buy out up to three years of this reduction.
You must still be paying into the scheme when you retire and your State Pension age must be greater than 65.
Please read the 'Early retirement reduction buy out factsheet' for more information. You can download a copy, together with a list of contribution factors, from the panel on the top right of this page.
For an application to apply, you must inform SPPA of your intention within six months of joining the scheme by using the 'Early retirement buy out quote form' also available to download from this page.