Blog

29 OCT 2023

College pension contributions to rise

The government has announced a 5% increase in employer contributions to teachers' pensions, affecting both state and private educational institutions. The contributions will rise from 23.6% to 28.6%, effective from April.

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Impact on State Schools and Colleges: The government has committed to funding the increased contributions for state schools and colleges, as well as other directly funded educational settings, for the fiscal year 2024/25. This temporary funding aims to alleviate the financial burden on these institutions.

Impact on Private Schools and Universities: Private schools and universities, however, will not receive government support to offset the increased pension contributions. As autonomous bodies, higher education providers are excluded from this funding provision, placing the financial onus directly on them. Over 300 private schools have withdrawn from the Teachers’ Pension Scheme since 2018, and the National Education Union (NEU) anticipates that more institutions will opt out due to the increased costs.

Reaction from the National Education Union: The NEU has expressed significant concern, particularly for private school teachers, emphasising that the potential loss of a secure pension is a serious issue that warrants societal attention. The union has committed to actively supporting its members in defending their employment terms and pensions.

Political Context: This development occurs alongside the Labour Party’s pledge to impose VAT on private schools if they come into power, further intensifying financial pressures on private educational institutions.

Conclusion: The government’s decision to increase pension contributions presents a dual scenario: state schools and colleges receive temporary financial relief, while private schools and universities face increased financial strain. This dichotomy raises concerns about the long-term sustainability of pension contributions for teachers, particularly in the private sector, and may lead to further shifts in the educational landscape.