Teachers at independent schools are to be asked to pay higher contributions into the Teachers’ Pension Scheme (TPS) for the first time since 2015.
A consultation launched this month is recommending every teacher except those on the lowest salary band pay a third of a percentage point more from next April to help plug a shortfall in the scheme.
The Department for Education said rates would not increase for the lowest-paid, and the impact for someone earning £110,000 a year would be an additional £17 per month, or just under £200 a year. Teachers earning up to £34,289 would see no change.
Secondsight Associate Director Richard Evans said:
“This announcement could come as a surprise to many who have been used to schools picking up the cost on the TPS rather than teaching staff.
“Whilst a fraction of a per cent may not sound much, it needs to be highlighted that this is yet another increase in the overall cost of the TPS for a pension benefit that has become less generous in recent years with the move from final salary to career average.
“The fact this proposed increase comes in between valuations as a result of the required member contribution yield dipping marginally below 9.6% suggests how tight the TPS’s funding levels could be.
The question is, does that help mitigate the risk of further increases for schools come the next valuation or does it herald yet another increase in the employer rate?”
The consultation finishes in January with any rise implemented in April. This latest development comes as independent schools are already grappling with successive employer contribution rates, currently standing at almost 29 per cent in England and Wales. Management teams are also dealing with VAT on fees and the rise in national insurance contributions announced in the Budget.
