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Most teachers to pay less into their pension under new plans
DfE launches consultation on cutting employee contribution rates for the Teachers’ Pension Scheme across most salary bands
Teachers are set to pay less into their pensions from next year under new proposals from the government.
The Department for Education has on its plans to cut employee contribution rates by 0.2 percentage points across most Teachers’ Pension Scheme (TPS) salary bands from 1 April 2027.
The lowest contribution rate, paid by those earning up to £36,198, would remain at 7.4 per cent.
But the rate for those earning between £36,199 and £48,727 would fall from 8.9 per cent to 8.7 per cent; the rate for those earning between £48,728 and £57,776 would drop from 9.9 per cent to 9.7 per cent.
The rates for three higher bands would also fall by 0.2 percentage points, including for those earning more than £104,413, who will see their pension contributions drop from 12 per cent to 11.8 per cent.
Details are available here on how this relates to the national pay scales.
Why teacher pension contributions are falling
Teachers currently contribute 9.6 per cent of their pay collectively towards the cost of their pension benefits.
But the latest valuation, , found that continuing with the current contribution structure would result in the scheme collecting more than the required 9.6 per cent.
A “small adjustment” is therefore needed to the tiered contribution structure, the DfE said.
The proposed rates would apply from April 2027 until March 2029 and affect around 780,000 active TPS members.
When announcing the 3.5 per cent teacher pay rise for 2026-27 last month, the government said that employer contributions to the TPS would be 17.6 per cent from April 2027, down from 28.6 per cent.
Other pension changes
The consultation also proposes clarifying when ill-health pensions for former teachers can be stopped.
Under the plans, an “out-of-service” member’s entitlement would cease if they no longer meet the requirement of being unable to undertake any form of employment.
The government has also proposed changes to short-term pensions paid to surviving adults and children following the death of a TPS pensioner.
From April 2027, these would generally be based on the pension actually being paid to the member when they died, including adjustments.
The DfE acknowledged that this could result in some beneficiaries receiving a lower amount than under the current regulations. Existing awards would not be affected.
The consultation closes on 30 October, with changes expected to come into force by April 2027.
