Teachers’ Pension Scheme contributions on the rise

The Department for Education has confirmed that the employer contribution rate for the Teachers' Pension Scheme will rise by 5% to 28.68%.  

This will be a significant extra sum for employers who don't receive government funding to cover the increase.

The increase is due to come into effect from 1 April 2024.  Education providers who will receive additional funding include:

• Eligible early years providers;
• Mainstream schools covering children aged 5-16;
• Post-16 and further education settings; and
• High needs settings.

Higher education providers and independent schools will need to cover the costs themselves.

This increase follows the increase from 16.48% to 23.68% in 2019 which has seen lots of independent schools decide to exit the scheme - either entirely or to close it to new joiners.  Some schools have changed contracts to ensure that any additional employer contributions have the effect of reducing the employee's salary by a corresponding amount.

For those independent schools which haven't yet acted, a rush for the exit seems likely.