The employer contribution rate to the Teachers’ Pension Scheme (TPS) will rise from 23.6% to 28.6% of pensionable pay from 1 April 2024. The increase will prove an affordability challenge for independent schools and may result in some seeking alterative pension options.
Justin Corliss, technical manager at Royal London, said:
“As from next week (1 April), schools will feel the impact of a significant increase in the employer contribution rate for teachers’ pensions. First announced by the Government last autumn, schools will have to swallow an increase from 23.6% to 28.6%.
“The impending hike follows a rise in 2019 which saw employer rates increase from 16.4% to 23.6%. The cumulative effect of these rises will have many independent schools questioning the affordability of remaining in TPS, especially as they face rising costs across the board.
“Managing costs and maintaining pupil numbers while absorbing a rate rise of over 20% will have many independent schools weighing up their options. Some may feel compelled to take action in a bid to have greater certainty around future costs, especially as a change of Government could spell further cost pressures in the form of VAT on school fees and other potential changes.”
