TPS contributions of 30% from April 2024?

Contributions on the rise - can you afford them?

Working in the independent schools sector, you’re probably already aware that the Treasury has said the Teachers’ Pension Scheme valuation will likely result in an additional 5% or thereabouts on employer contributions (also the case for the Scottish Teachers' Pension Scheme). 

However, that doesn’t take account of the McCloud judgement; we still don’t know precisely when that will be finalised and factored into contribution costs.  

Also, bearing in mind the scheme valuation is very late and the contribution rate should have been effective from April 2023, there is also the further cost of delay to be factored in. That one-year delay from April 2023 to April 2024 could easily add another 1%.   

The net effect of both these considerations is that we could still be talking about employer contributions in the region of 30%. 
 
Related to that, according to official sources the delayed implementation date for the new contribution rate remains 1 April 2024. There has been some speculation that the implementation might be further delayed again to 1 September 2024, but that is now looking less likely with the Treasury stating that there will be no additional funding for state schools to meet the cost of delay beyond April.  
 
We should know more in a matter of weeks: September is when we are due to be told the outcome of the scheme valuation and the new contribution rates.  

Watch this space for further updates.  

Our advice? Plan for increases from April 2024, but if those aren’t affordable for your school then you urgently need to find a workable alternative. 

If you’d like to talk to us about your school’s pension scheme, get in touch – we’d love to hear from you.