More than a third of all independent schools in England and Wales have either withdrawn, or plan to withdraw, from the Teachers’ Pension Scheme (TPS), according to a new analysis of FOI data by financial mutual Wesleyan.
Since 2019, 580 schools have notified the Department for Education of their intent to withdraw. This represents 34% of all independent schools in England and Wales*.
In the first six months of 2024 alone, 93 schools withdrew or began a process of withdrawal – more than the entire number that did so in 2023 (90).
Schools have been leaving the TPS amid concerns about affordability as employer contribution rates have climbed. In September 2018, TPS employer contributions rose from 16.48% to 23.68%, and in April 2024 jumped further to 28.68%.
Darren Mills, specialist financial adviser at Wesleyan Financial Services, said: “This trend is really concerning for teachers.
“The TPS is an incredibly valuable benefit. It’s one only one of eight pension schemes that are guaranteed by the UK government, it’s inflation-proofed, and it provides retirement income that’s directly tied to their salary.
“Thousands of teachers who expected to have it throughout their careers could now find themselves needing to change to less generous, and less certain, pension schemes. Some may need to re-think their retirement plans as a result – adding stress and complexity to a profession that is under strain as it is.
“Looking ahead, we expect to see only more schools withdrawing from the TPS. Many are struggling to absorb or fully pass on the contribution rate rises – something that could be compounded further by policy changes post the 4 July General Election.
“We’re urging any teacher who is affected, or is worried about being affected, to seek professional financial advice on what a change in pension circumstances could mean for them.”
