Question to the Department for Education:

To ask the Secretary of State for Education, what estimate she has made of the average cost to independent schools of the increase in employer contributions to the teachers' pension scheme in the academic year 2024-25.

Departmental officials regularly gather data on the number of teachers opting out of participation in the Teachers’ Pension Scheme (TPS) and discuss this with members of the Scheme Advisory Board, which is made up of employer and member representatives. Due to pension auto-enrolment rules that apply when a maintained school converts to an academy and pension re-enrolment rules requiring teachers to re-submit opt-outs, it is difficult to discern any particular trend. However, officials also monitor the overall participation rate of those eligible to be in the TPS and this has remained consistent in recent years.

The department is not usually informed when independent schools consult with staff regarding ongoing participation in the Teachers’ Pension Scheme. However, the scheme administrator does maintain a record of the number of independent schools participating in the scheme, as well as those that choose to leave the scheme either outright or by phased withdrawal. Independent school participation is regularly discussed with members of the Scheme Advisory Board, which is made up of member and employer representatives; such discussions start from the principle that independent schools participate voluntarily and have the right to cease participation if they so choose.

The employer contribution rate for the Teachers’ Pension Scheme (TPS) increased from 23.68% to 28.68% of member salary with effect from 1 April 2024. This followed on from the results of the most recent scheme valuation exercise, which was based on 2020 data. The revised rate will lead to an increase in pension costs for all participating employers roughly equivalent to 5% of their teacher salary costs in the 2024/25 academic year. Work has not been undertaken to estimate an average cost increase across the independent school sector because this was needed to reflect the estimated costs of pension benefits that have been accrued by members of the TPS, and those benefits that are forecast to be accrued in future. Independent schools have the option to cease participation in the scheme, either outright or through phased withdrawal, if they do not consider they can meet the costs or otherwise no longer wish to continue participation.