Listen to this story Members can listen to an AI-generated audio version of this article. 1.0x Audio narration uses an AI-generated voice. 0:00 0:00 Become a member to listen to this article Subscribe A “considerable reduction” to the amount FE providers contribute to teachers’ pensions is “highly likely” following a revaluation of the scheme, a minister has revealed. But teachers’ contributions and pension pots are not expected to be affected by the change. Colleges and other further education providers currently pay a fee equivalent to 28.6 per cent of teachers’ wages every year into the teachers’ pension scheme. But speaking in the House of Lords yesterday, skills minister Jacqui Smith said the rate is expected to drop significantly amid a review of the amounts paid into public sector schemes. “[Rates] have gone from 16.48 per cent in 2019 to the current 28.6 per cent,” she said. “It is highly likely… that there will be a considerable reduction in the average employer contribution rate as a result of that revaluation.” Any change would come into effect next April and would remain in place for four years. £12bn lower Smith noted that the government actuary’s department has written to the Treasury stating the “average employer contribution rate across the unfunded public service pension schemes, of which the TPS is one, is expected to fall significantly”. Across the schemes “contributions are expected to be over £12 billion lower in 2027-28 than in 2026-27”. The expected reduction is due to an increase in the SCAPE discount rate, a government assumption used to calculate the value of future pension benefits. Employee contribution rates of 9.6 per cent on average will not be affected by the change. Pension pots will not be impacted either.
JustSaying 17 June 2026 If adding the employees contribution to the 28.6% employers contribution then the resulting 38% of teachers salary cost funded by tax payers goes into the pension pot. This is a staggering sum of taxpayers money which dwarfs consideration of the cost of any pay awards and the arguments of extra 1% increase here or there. Such enormous levels of employer pension contribution is sadly not just confined to teachers but to many other areas of the public sector such as NHS nurses and local government workers. These levels of pension contributions paid for by taxpayers add massively to the challenges of our economy. Staffing costs in schools typically account for 75% – 85% of the budget and therefore for every £1 of tax raised for education 30% of this goes in to pensions. I hope that teachers appreciate this gold plated tax payers sacrifice that is made to support the important role that they do.
Liam 7 July 2026 Exactly. Taxpayers are paying all this money to the people who stop them from dying, care for them when recovering, educate them and their children, and do all sorts of other useless jobs when we could be giving even bigger tax breaks to billionaires and further facilitate the massive transfer of wealth from the less affluent to the more affluent we have seen under austerity. Maybe we could buy everyone a cap so they would have something to doff when kowtowing to the rich and powerful and espousing the empty rhetoric which keeps them rich and powerful.