Almost a quarter of UK independent schools exiting Teachers' Pension Scheme

Nearly a quarter (23 per cent) of the UK’s independent schools have left, or are planning to leave, the Teachers’ Pension Scheme, according to a freedom of information (FOI) request made by Punter Southall Aspire.

The FOI response showed that a total of 284 out of 1,222 have left or plan to leave after contribution costs for the scheme increased from 16 to 23 per cent, with a further review due in 2022.

The increasing contributions have in turn pushed the price tag on the scheme for schools up by 43 per cent, which Punter Southall Aspire warned could place even more strain on budgets already under significant pressure.

Punter Southall Aspire senior DC consultant, Stuart Arnold, who has been working on this issue with around 30 independent school clients, also warned that even more schools are set to leave due to the increasing risk posed by the cost of the scheme.

However, Arnold noted that any new contribution rate will be pushed back to April 2024 as the sector adjusts in the aftermath of the pandemic, suggesting that this will provide “valuable time” for schools to consider their place in the scheme and any alternatives.

He said: “Financial managers, governors and bursars have enough to deal with at the moment without this added, further pressure.

“Costs for this pension scheme are only going one way. It might be a cost some schools are willing to bear but our work tells a different story for many. Pensions are a valuable, important benefit and we believe in helping teachers to achieve their retirement goals.

“Every school is unique and we support them to make the right, individual decision for them and their teaching staff.

“A pension is a powerful recruitment and retention tool but only if it’s cost-effective, sustainable and fit-for-purpose. As we have seen from those which have left, there is another way forward for both schools and teachers.”

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