Teachers Leaving Pension Scheme for Short-Term Stability: According to a report published by TES, based on a document which the outlet has seen, the number of teachers leaving the Teachers’ Pension Scheme (TPS) between April and August 2014 increased by almost half compared to the year before – with more than 2,500 individuals leaving the TPS in that period. TES claims that thousands of teachers are leaving the scheme due to increased contributions, and that this may even result in schools needing to cut the number of teachers they employ in order to balance their accounts.
On average, teachers’ contributions have risen by 3.2% since 2011, with head teachers in the highest pay bracket contributing around twice as much as they were in 2011 (up from 6.4% to 12.4%).
Some commentators have suggested that teachers are leaving the pension scheme in order to reduce their out-goings in the short-term, at the expense of longer term financial stability.
In the report, TES states that teachers have seen a real-terms pay cut of 10% in the last decade, and that more than half of those leaving the pension scheme cited their own personal financial situation as the reason for doing so.
As well as increased contributions, changes to the structure of the TPS mean that retirement ages for teachers are increasing – rising to 68 currently. In addition, the size of the final pension pot will not be based on career average salary, rather than final salary as had been the case previously.
In addition to individual teachers feeling the strain, schools will also see their own contributions to the TPS rise by around two and a half percent in September – with head teachers warning that the increase may lead to them needing to lay off staff in order to balance the books. This will be followed by a rise of 3.4% in National Insurance contributions the year after for staff earning less than £40,040. Combined, the two increases mean that a school will pay around £1000 more for a teacher earning £35,000.
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