Increase to Teachers’ Pension Contributions

The government has announced that it will increase teachers’ pension contributions for the first time since 2015.

Last year, the Department for Education consulted on plans to raise contributions for teachers earning the most to avoid a shortfall in the fund and the changes have now been ratified, and will come into effect on April 1.

Teachers earning less than £34,873 will not be affected, their pension contribution will remain at 7.4 per cent. Teachers on £50,000 will pay an extra £10 a month or £120 a year, and those on £110,000 will pay an extra £17 a month, or £198 a year.

The six ‘contribution tier’ rates had remained the same since 2015, but the thresholds at which each rate is paid had increased annually in line with inflation. As a result, the ‘estimated yield’ from the current structure is now 9.45 per cent, whereas members are required collectively to contribute 9.6 per cent across the whole scheme membership.

It is reported that the government received 187 responses to the consultation, with just under half backing the plans, including most unions.