We are aware that the Teachers' Pensions Scheme has been issuing pension saving statements over the past few weeks. These statements relate to the £60,000 HMRC annual allowance limit for pension growth within the tax year 2025/26 and will have been issued to any members that came close to, or breached this limit in that year.
It’s important to understand that the figures quoted in these statements do not relate to the amount of pension contributions you and your employer have paid throughout the tax year. The figures are based on an actuarial calculation which uses various factors to calculate how much the value of your pension has grown from one year to the next.
If you have received a statement that advises you have exceeded the limit for the tax year in question, this does not necessarily mean that you will have to pay a tax charge.
If you have any allowance remaining from the previous three tax years, it is possible to use this to offset the current excess so do check your statement carefully as it does include the figures from the previous tax years in order for you to calculate whether you may be subject to a tax charge or not.
Please bear in mind that the figures quoted on the statement will only include growth relating to your Teachers' Pension. If you have additional benefits elsewhere, they will also come under the same £60,000 allowance.
Check statements carefully
Tax is your personal responsibility, so if you have received one of these statements it is important that you engage with it, read the contents of the letter and the signposted fact sheet carefully, then check whether any action needs to be taken to avoid any late payment or penalty charges.
If you have not exceeded the limit or clearly have enough available from the previous years to offset any breach then you are not obliged to report anything to HMRC.
If you do not have enough available from previous tax years to cover the breach, then you will need to report this to HMRC via a self-assessment tax return. The deadline for the 25/26 tax year is the 31st January 2027.
You can then pay the tax charge direct to HMRC yourself or ask for the Teachers' Pension Scheme to pay the charge on your behalf. This is known as making a ‘Scheme Pays election’ and there is a link to the relevant form within the statement.
ASCL is unable to offer financial advice, therefore if your situation is more complex and you feel that consulting a tax expert might be necessary, you may wish to speak to our
partner BHP for guidance in this area.
For more detailed guidance on annual allowance, please see the
Teachers' Pension Scheme Factsheet.