Colleges, Pensions

College pension contributions to rise – but government will fund (for now)

The rise of more than 20% for state schools and colleges will be funded by government, but private schools and unis left out

The rise of more than 20% for state schools and colleges will be funded by government, but private schools and unis left out

Contributions that schools pay towards teachers’ pensions will rise by more than 20 per cent from April.

Government has committed to funding the rise for state schools and colleges for one year, with any further commitments to be decided at future spending reviews.

But private schools and universities have been left out – meaning they will have to soak up the extra costs.

Employer contributions will rise from 23.6 per cent to 28.6 per cent after a valuation to “ensure the scheme continues to meet present and future obligations”.

A statement announcing the changes read: “The department will provide additional funding to cover the increase in the employer contribution rate for directly funded scheme employers for the financial year 2024/25. This includes mainstream 5 to 16 schools; high needs settings; post 16 and further education settings; and eligible early years providers.

“HE providers are autonomous bodies and the government does not fund the costs of changes to the scheme for them in the same way as for schools and colleges.

“The Department for Education appreciates that the result means independent schools that participate in the scheme will be faced with additional costs that aren’t funded. 

“It’s hoped that the information shared previously, on the likely final result, will have helped them in planning for the change.”

It comes alongside the commitment from the Labour Party to impose VAT on private schools should it form a government.

More than 300 private schools have already pulled out of the Teachers’ Pension Scheme since 2018, according to analysis released this month.

The National Education Union said it anticipates more will now follow suit. 

Daniel Kebede, general secretary of the NEU, said private school teachers to “face the threat of losing a decent pension is unacceptable. It should set alarm bells ringing across society.

“The NEU is not prepared to sit back while our members see their contracts of employment ripped up and their pensions snatched away. The NEU will robustly support our members to take all necessary action to defend their terms and conditions.”

The NEU said the rise was down to a technical change imposed by government. 

Correction: We originally stated this was a five per cent rise, rather than five percentage points.

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