Teachers’ Pay Grant and Pension Changes
13th November 2018
Teachers’ Pay Grant
The government has revealed how it will dish out extra cash to fund teacher pay rises this year, with schools set to be paid the grant later this autumn, new documents show.
It was announced in July that teachers would get a rise of up to 3.5 per cent this year, after the 1 per cent cap on public sector pay rises were lifted. However, some teachers will only get a 1.5 per cent increase.
Documents released today confirm the amount being made available to schools to pay for rises will total £187m this year and £321m in 2019 to 2020.
The funding figure for this year covers the seven months from September 1, when the award came into effect, to the end of the financial year in March. The grant is bigger for 2019-20 because it will cover the full 12 months from April 2019 to March 2020.
The money will be allocated on a per-pupil basis, which the department said was the “simplest, most transparent and timeliest way to get the money to schools”.
To calculate the amount schools will get, the government has taken the overall annual pay bill for teachers, including additional costs such as pensions and national insurance, and applied the average percentage uplift of the announced 2018 to 2019 pay award.
Below is a guide to help school leaders understand and plan for the teachers’ pay grant. This methodology will help you to understand the teachers’ pay grant, covering the 2018 to 2019 and 2019 to 2020 financial years.
Changes to Teachers’ Pension Scheme
The current employer contribution rate for the Teachers’ Pension Scheme (TPS) is 16.48 per cent. This was put in place on 1 September 2015, but it is expected to change following the outcome of the next actuarial valuation of the TPS. Early indications suggest that the amount employers pay towards the TPS will need to increase. The exact level of the increase is not yet known.
HM Treasury has agreed to defer implementation of the new employer rate until September 2019 to help schools and other employers with financial planning and give sufficient time to make the practical changes needed.
Considering the unforeseen additional costs, the Department for Education will be providing additional funding to maintained schools and academies in 2019-20 to support the implementation. The approach to funding from 2020-21 onwards will then be taken forward as part of the Spending Review.
Schools were told in an email from the Department for Education at the end of September 2018, that employer contributions are expected to rise to 23.6 per cent from September 2019.