Teacher pension contribution increase takes effect

The government has announced that it will increase employer contributions into The Teacher’s Pension Scheme to 23.6 per cent, effectively immediately.

The rise follows a consultation, which closed in February and recommended the rise, and has been announced as part of the government’s plans to reform teacher pay structures.

The Department for Education expects that the increase, which is on top of salary, will cost around £1.5bn each year and is a part of the recently announced £14bn schools investment.

Commenting, chancellor, Sajid Javid, said: “This £14bn funding increase means our schools can continue to raise standards and build an education system that boosts productivity, improves social mobility and equips children with the skills and knowledge they need to succeed in the bright future that lies ahead.

“In addition to this package, schools will receive £4.4bn over three years to cover rising pension costs and ensure they can focus their resources on the front line.”

With the £4.4bn of funding over three years, the government expects to be able to fully fund the increase.

The plans will see the minimum starting wage for a teacher in England and Wales increase to £30,000 by 2022. A teacher on this wage would therefore receive around £7,000 in pension contributions, on top of their salary.

Despite the extra funding, the government could be facing legal action from teachers on the ground of age discrimination.

In August, law firm Leigh Day said that teachers have ground for a legal challenge against the government for age discrimination, in a case similar to the one won by judges and firefighters against the government in December 2018.

Younger teachers were moved into a new government pension scheme less beneficial than the older scheme, while older workers who are within 10 years of retirement have been allowed to stay in the old scheme.

    Share Story:

Recent Stories


The modern age
Deputy editor Natalie Tuck chats to the ABI’s Yvonne Braun about her work at the ABI and her thoughts on key pension topics

Stepping into the spotlight
Laura Blows speaks to Laird R. Landmann, group managing director and co-director of fixed income at US-based TCW, about the opportunities TCW can provide for UK pension funds