The Government has now announced that for the Teachers’ Pension Scheme (TPS) “the direction of travel is in the order of a 5% points increase in the employer’s contribution rate” (from the current rate of 23.68%). The Government hopes to confirm the precise rate in September 2023. The new contribution rate is due to be implemented in April 2024.
Whilst this is not the 30%+ figure that many in the sector had feared, it is still a significant further increase. The broader picture is that employer costs for the TPS will have nearly doubled in a less than five year period (from 16.48% in September 2019 to c. 28.68% in April 2024).
Several hundred independent schools have already left the TPS and many more have already implemented ‘phased withdrawal’ (closing access to the TPS to new joiners). For those that currently remain in the TPS, the confirmation of a further increase in costs will cause significant concern at a time when independent schools face widespread financial pressures.
Many school governing bodies are now reviewing their options with a view to beginning consultation on a potential exit from the TPS this September so that they can mitigate the impact of higher contributions by April 2024.
How Moore Barlow can help
Our schools team has extensive experience in guiding schools through consultations on the Teachers’ Pension Scheme. Contact the independent schools team for further details, or find out more about our TPS services and range of fixed fee TPS support packages.
