HELP! I'M RETIRED AND TEACHER'S PENSION SCHEME IS DEMANDING MONEY FROM ME

I'm seeking urgent advice and assistance regarding my pension with the Teachers' Pension Scheme.

I've tried various ways to contact them since February including working with my local MP and the Pensions Ombudsman but to no avail, despite letters and official complaints.

The rectification statement I received in February regarding the McCloud judgement gave me two options both of which mean I have to pay back money even though I took early retirement in 2020.

As you can imagine this was quite a shock and the extensive document didn't make sense to me and has also confused various financial advisers and others who have seen it.

Despite seeking clarity from the Teachers' Pension Scheme on several occasions listing specific questions I need answered to help me make my choice I've not received anything other than standard generic letters which are useless.

So in February I have to make a choice and sign to say I completely understand the choice and its implications which I don't.

However if I don't choose, the TPS apparently will choose for me.

After 34 years of teaching I'm disgusted and have spent hours trying to resolve the issue. As you can imagine it's also negatively impacted my emotional well being.

I've no idea how I can afford to pay them back and they give no details at all as to how and when that would happen. I'm now at my wits' end as my February deadline approaches.

Steve Webb replies: You have been affected by a court judgment which ruled that the way changes to public sector pensions were made in 2015 amounted to age discrimination and needed to be undone.

This is commonly referred to as the 'McCloud judgment'.

To undo this age discrimination, millions of affected workers are now being given an option to 're-write history'.

To be more precise, they now have to decide whether, for the period from 2015 (when the rules changed) to 2022 (when the new system came in for all), they want to be treated as if they had been in the old scheme or the new scheme for the entire period.

There are various differences between the two schemes, but a key one is that the old scheme paid pensions based on people's 'final salary', whereas the new scheme pays pensions based on their 'career average'.

What is unusual about your case is that you have been told that, whatever choice you now make, you will have to pay money back to the Teachers' Pension Scheme.

This should certainly have been explained to you more clearly, and it's disappointing that you have found it so hard to get answers to your questions. So I will explain here what is going on.

When the Government decided to reform public service pensions with effect from 2015, it had to decide what to do about people who were close to retirement.

It decided that some people who were very close to retirement could carry on under the old rules, whilst younger workers would be switched immediately to the new rules.

But there was a group of workers, such as yourself, who were neither very close to retirement (and hence able to stay in the old scheme) nor very far away from retirement (and hence moved immediately to the new scheme).

Specifically, you were between 10 years and 13.5 years from pension age in 2015.

As a result, in the Teachers' Pension Scheme, you were covered by 'transitional' rules whereby you were able to carry on in the old scheme for several years post 2015 but then switched to the new scheme for the last few years before retirement age.

When you receive a letter inviting you to make your 'McCloud' choice, this means choosing to be entirely in one scheme or the other, rather than the 'mix and match' membership that you actually experienced.

You have sent me a copy of the letter you have received, and this gives you a table showing the impact of the two different choices.

If you had stayed in the old ('final salary') system throughout, this would have given you a larger lump sum (by just over £1,000), but a lower annual pension since you retired.

If you opt for this scheme throughout, the net effect is that you would have to make a relatively modest repayment to the scheme of around £300.

If you had moved immediately to the new ('career average') system, this would have given you a much smaller lump sum (by around £8,400), but a slightly higher annual pension.

If you opt for this scheme throughout, the net effect is that you would owe the Teachers Pension Scheme just under £8,000.

It may seem obvious that you should choose the option which results in the smallest repayment to the scheme.

But the paperwork shows that the option with the larger overpayment to date (the 'career average' option) is also the one that will give you the highest pension going forward.

So, in making your choice, you will need to weigh up both the immediate cost and the difference in pension for the rest of your retirement between the two options, which I see is roughly £400 per year.

Whilst I cannot give you personalised advice as to which option you should choose, I hope that this clarifies what is going on, and helps you to make a more informed choice.

I do think people in your situation should be offered more assistance in making their decision.

Have you been hit by a similar decision? [email protected] 

2026-01-19T07:22:23Z