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DfE pledges extra money to cover increased teacher pension costs

But schools are still in the dark about whether the government will cover higher contributions in future years

The DfE will provide more money to cover the costs to schools of increased contributions to the Teachers' Pension Scheme.

The Department for Education will provide extra money to ensure that schools do not lose out in the first year that they have to pay higher contributions to teachers’ pensions.

However, a DfE document published today still leaves schools in the dark about whether they will have to fund the increase from their own budgets in the years that follow.

The government announced last September that schools would see the amount that they had to pay into the Teachers’ Pension Scheme rise from 16.48 per cent now to 23.6 per cent in September 2019.


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The DfE had pledged £830 million to cover the extra cost of the increase for state-funded schools until at least April 2020, and £80 million to cover FE colleges and other public-funded training organisations.

But it said that it would not cover the costs of independent schools, sparking fears for the future of many prep schools.

Today, the DfE published its response to its consultation about the issue.

The response says that the money for schools will be allocated on a per-pupil basis, and that the DfE will create a new supplementary fund to help schools that are still left out of pocket.

The DfE says this will mean that any school with shortfall of more than 0.05 per cent of its grant, compared to its actual costs, will not be left in financial difficulty.

This supplementary fund, together with some extra costs for FE institutions, will increase the total cost to the DfE from £910 million to £940 million.

FE institutions will receive funding based on their actual costs.

However, the consultation response does not say whether the government will fund the increased costs for schools beyond 2019-2020.

Speaking during the consultation period, Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), said he would be seeking assurances that funding would cover the cost of the increased contribution rate "in full" not just for next year but for future years.

He added: “Schools and colleges are very concerned about the potential impact of this. They cannot afford yet another unfunded cost on budgets which are already under severe pressure.”

Julia Harnden, ASCL's funding specialist, said the uncertainty about funding after the first year was “jeopardising” schools’ ability to plan budgets.

The DfE said that a decision about funding beyond 2019-20 would be made as part of the government’s Spending Review, which is expected to get underway before the summer holiday.

Education secretary Damian Hinds has previously said that when the Spending Review starts, he will “take that opportunity to make the strongest case for education”.

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