Page 2 | Those deciding which independent school to accept - check if it is still in Teacher Pension

WombatChocolate · 2023-02-26T14:40:14+00:00

I’ve been following a number if the threads where people have been trying to decide which offer to accept and grappling with journeys, scholarships, extra curriculars, etc etc. One further thing to consider in the mix - do you know if the independent school you’re considering remains in the Teacher Pension Scheme? A number of schools (significantly less than half still) have withdrawn from the pension so they can reduce the longer term commitment to have much the school needs to fund their staff pensions. On one level, parents might think that looks good because it means fees will be a bit lower. That is probably true. However, also consider staff recruitment into the future. We all know there is a teacher recruitment and retention crisis. Even the top independents are finding they have fewer applicants and sometimes none or no quality ones for vacancies. Schools that have left the Teacher Pension Scheme will find it harder and harder to recruit quality staff, because they will simply have the option to go elsewhere - to a state school or an alternative independent. The vast majority of top and larger independents still remain within the Teacher Pension scheme. So, it’s just something you might want to ask at Offers Days and bear in mind. If your child wilL be going to a school for 7 years, you’d hope the good existing staff will stay and as people naturally leave, that the school will manage to recruit great replacements. Some schools might find that 7 years down the line, their staffing quality is quite different to today or even the last couple of years ago. Just something else to consider.

Original poster

WombatChocolate · 02/05/2023 16:51

Remmeber that over 90% of teachers are in the state sector and the TPS is not under threat for them. Likewise, the many NHS workers and Civil Servants have very similar pensions which are not being taken away from their staff.

The government is not indicating that it is going to pull the plug on these schemes. They are funded by general taxation, so there isn’t a pensions black-hole in the same way that some private sector final salary schemes had a black hole.

And of course teachers in the private sector don’t want their pension taken away from them. It is worth an enormous amount and forms a key part of the overall package. Ditching it is a sizeable reduction in the overall benefits package, so the equivalent of a substantial paycut. No teacher is going to be pleased about that.

Schools exist in a labour market where teachers have choices about where to work. They can choose between a private school with the TPS, a state school with the TPS or a private school without the TPS. It’s hardly surprising which will be more popular employers.

And yes, it will take some time for the real impact on recruitment to be seen. It’s naive to imagine it won’t make any impact ….it assumes teachers are daft and don’t value a really significant benefit that is available in many places.

Yes, it’s a big expense for schools. But independent schools have to budget for key staffing costs, and this is one of them. Would anyone recommend that any school offers a salary that is £10k less than the market norm in order to manage their budget? No. The TPS is part of the market norm.

Look at the NEU website to see the figures on how many indeoendnet schools remain in the TPS and how many have left. People might be told by some schools that most schools have left. It’s a myth. The vast vast majority are still in it.

OP posts:

Ladybowes · 02/05/2023 09:15

Notonyours · 01/05/2023 21:59

The TPS is a failing scheme, teachers should just be renumerated property in terms of salary and benefits full stop, not through an unaffordable and fundamentally risky scheme that it is very clear the government want to make unaffordable, so schools do withdraw and they can wind down. The only reason the employer contributions continue to go up, and are about to double, is because the fund is a black hole any they need to cash.

These incredible, employer contributions, which ate being asked of by the TPS are again, in the whole unafordable, it's a nod to byegone eras of full salary pensions, which are dead and buried.... apart from the Telecom, national rail, national power schemes, etc. that generations of young workers will be funding for decades to come through their tax.

I'm all for every teacher being renumerated and rewarded extensively for their work, but this thread stinks of the ramblings of disgruntled teachers who are angry their TPS might be going away.

The tps is not the future, it's a broken dinosaur. But we do need an effective and rewarding alternative so teachers are paid properly on monthly basis, can save for a comfortable retirement and that schools can properly afford it.

I’m not a disgruntled teacher worried it’s going away for me - to be fair I’ve got my pension scheme and I was lucky enough to get the 80% final salary scheme when I first joined 20 years ago. It’s not me that will be impacted if the scheme is abolished but new teachers.. and quite frankly teachers terms and conditions have been eroded so much in the past 50 years this is one thing the needs to stay in my opinion.

Notonyours · 01/05/2023 21:59

Properly *

Notonyours · 01/05/2023 21:59

The TPS is a failing scheme, teachers should just be renumerated property in terms of salary and benefits full stop, not through an unaffordable and fundamentally risky scheme that it is very clear the government want to make unaffordable, so schools do withdraw and they can wind down. The only reason the employer contributions continue to go up, and are about to double, is because the fund is a black hole any they need to cash.

These incredible, employer contributions, which ate being asked of by the TPS are again, in the whole unafordable, it's a nod to byegone eras of full salary pensions, which are dead and buried.... apart from the Telecom, national rail, national power schemes, etc. that generations of young workers will be funding for decades to come through their tax.

I'm all for every teacher being renumerated and rewarded extensively for their work, but this thread stinks of the ramblings of disgruntled teachers who are angry their TPS might be going away.

The tps is not the future, it's a broken dinosaur. But we do need an effective and rewarding alternative so teachers are paid properly on monthly basis, can save for a comfortable retirement and that schools can properly afford it.

Takeachance18 · 01/05/2023 21:39

If anything more will leave with inflation at the rate it is and the black hole of funding and expected rise in employer contributions from 23.6% by a few percentagepoints from April 2024. It may be offset by holding down pay, so that the overall package is similar. It remains a minority public sector pension scheme which is available when working in the independent sector. International teachers may be targeted as they are not already benefiting from TPS, but teacher movement is fairly common, the issue is if you get lots all leaving at the same time.

Ladybowes · 01/05/2023 21:08

@chillypeppr your school has had no issues yet.. let’s see if this is still the case 10 years from now. You may be right but I doubt it.

You might also find you get a higher turn over of staff who take a job on a short term basis for the experience and then jump ship as soon as they can. (Recruiting can be expensive too in many ways). This happens when teachers go abroad to teach.. they forfeit the pension in short term in the knowledge they will get a lot of money tax free for a short period of time - and then return to the UK for a more permanent job with a pension scheme.

Time will tell if this has been a wise move.

chillypeppr · 01/05/2023 20:22

I don't think this will affect all schools the same. Our school has had no recruitment issues and has left the scheme.

HawaiiWake · 01/05/2023 19:55

@WombatChocolate Thank you for explaining that GDST had closed this pension for new teachers and staff.

Original poster

WombatChocolate · 01/05/2023 19:51

The reality is that teachers in the independent sector looking to move job for whatever reason, absolutely factor in whether a chocolate is in the TPS when deciding where to apply.

The amounts a teacher would need to contribute to a new DC pension to deliver the same monthly retirement provision, along with spousal pension and inflation linked payments, is absolutely vast. Not everyone grasps this, but most do and would never choose to go to a school without the TPS.

Well over half of the independent schools that were in the TPS at the start of the option to withdraw, are still in it. And this includes the bigger and successful schools. It tends to be smaller and less successful schools that withdraw. More Prep schools have pulled out than senior schools, and those that struggle for numbers and to be full are more likely to pull out. It will certainly save the schools some money in the short term. But the future is going to be a smaller number of larger independent schools anyway. A number if these smaller and struggling schools are going to close anyway.

Anyone considering working in independent schools, understandably wants a stable school with a future. As people consider the salary, how robust the school finances are, they also consider other features such as staff discount in school fees and pension scheme.

From a prospective parent point of view, of course parents are interested in fees not rising more than needed. Fees are a struggle for many and with inflation being at over 10%, bug fee rises this year and next are on the cards. But you do have to ask what matters and makes the difference to the education you’re paying for. Is it the facilities or the smaller class sizes or the teachers? Aren’t teachers and good teachers at that, a school’s biggest asset? Isn’t it false economy to pay fees for a school that can’t attract the best staff because they aren’t providing a key benefit that is available in state schools and many other independents?

It’s worth remembering there is a massive teacher recruitment crisis across both state and private sectors. Especially in areas of high housing costs, many schools really struggle to recruit as more people leave teaching. Independent schools need to attract great teachers to justify their fees and the pension is something that makes a school attractive, or very unattractive now. Just ask anyone who works in the GDST schools that has closed the TPS to new staff joining how recruitment is going this year. They will tell you there are less applicants per job than ever. Some existing staff are leaving because of it, and whilst that won’t be all, as some feel ‘stuck’ for whatever reason, the effects will be seen over several years and not all immediately. Often only 1 or 2 apply for a job, and sometimes neither are really great…but the school takes one of them anyway because they need someone. The good applicants have gone to the schools offering TPS. It’s hardly surprising.

OP posts:

HawaiiWake · 01/05/2023 19:44

Didn’t GDST schools had this issue and teachers started a picket and strike days?

Ladybowes · 01/05/2023 17:22

@doglover90 agree with you completely. As a teacher half way through my career having just return after having children - no way would I stay in teaching if the teachers pension scheme was abolished. I certainly wouldn't work anyway that did not have the scheme. Especially now there are so many careers that offer wfh - by comparison teaching is not very flexible at all.

62 private schools withdrawing from Teachers' Pension Scheme (schoolsweek.co.uk) A couple of years of out of date now - but gives you a list of schools that have withdrawn so far.

In terms of younger teachers not joining the scheme - I would be interested to see some research on this- all the young teachers I know are in the scheme.. maybe that is because I work in the state sector and they have the choice.

You can pick your school using any criteria you like - but staff retention and happiness is massively important and not being part of TPS will impact this in the long run.

doglover90 · 01/05/2023 17:00

Notonyours · 01/05/2023 16:12

Ultimately, above and beyond everything else, it is very important to remember there is a reason why those indi schools who were in the TPS are leaving - because with the next increase, likely to go into the 40%, the employer contributions, for most schools, will be entirely unaffordable. The scheme has been and always will be an unaffordable black hole, it has no investments and therefore survives on a monthly basis by its % employer income. As soon as the big pension pot holder teacher generation's start retiring in droves, the government will be faced with a gigantic black hole and wl probably close the scheme anyway.

If a school could afford to stay in it im sure they would. But in this day and age, as long as the school does a good job of replacing the scheme, there are other great pension options out there.

In our 15km area all the independent schools (5 of them) are either out of it or in the process of withdrawing. The offerings in terms of a replacement scheme are on the whole pretty good, and for younger teachers more attractive as they keep more of their income and schemes tend to come with other affordable incentives such as private medical, electric car salary sacrifice, gym memberships, etc.

The two schools I am associated with have had no problem recruiting and on a whole the consultations with exisitng teachers to withdraw went well - mostly because the alternatives were properly explained, with many seeing the benefits.

Therefore, I don't think you can pick a school based on its TPS membership, but I would pay a bit more interest if a school was mid-withdrawl, to make sure staff were happy, instead I'd focus more on plans for the forthcoming tax changes under labour and how the school can weather those... or not.

If you think that a DC scheme is remotely comparable in benefits to TPS, I'd urge you to think again https://neu.org.uk/defined-contribution-pension-schemes-faqs I think a lot of younger teachers are making a huge mistake by not actually looking into how much money they're losing out on in the long term - it may be tempting to have extra money right now, but will they feel that way when they've retired and have very little to draw on?

Teaching is already in a recruitment and retention crisis. If the government pulled the plug on TPS, it would be absolutely disastrous for the profession. Personally I can't see it happening. Don't forget that the government are currently sitting on large reserves of money - all those tax increases and austerity level spending for over a decade is reaping the rewards 🙃

Notonyours · 01/05/2023 16:12

Ultimately, above and beyond everything else, it is very important to remember there is a reason why those indi schools who were in the TPS are leaving - because with the next increase, likely to go into the 40%, the employer contributions, for most schools, will be entirely unaffordable. The scheme has been and always will be an unaffordable black hole, it has no investments and therefore survives on a monthly basis by its % employer income. As soon as the big pension pot holder teacher generation's start retiring in droves, the government will be faced with a gigantic black hole and wl probably close the scheme anyway.

If a school could afford to stay in it im sure they would. But in this day and age, as long as the school does a good job of replacing the scheme, there are other great pension options out there.

In our 15km area all the independent schools (5 of them) are either out of it or in the process of withdrawing. The offerings in terms of a replacement scheme are on the whole pretty good, and for younger teachers more attractive as they keep more of their income and schemes tend to come with other affordable incentives such as private medical, electric car salary sacrifice, gym memberships, etc.

The two schools I am associated with have had no problem recruiting and on a whole the consultations with exisitng teachers to withdraw went well - mostly because the alternatives were properly explained, with many seeing the benefits.

Therefore, I don't think you can pick a school based on its TPS membership, but I would pay a bit more interest if a school was mid-withdrawl, to make sure staff were happy, instead I'd focus more on plans for the forthcoming tax changes under labour and how the school can weather those... or not.

Postapocalypticcowgirl · 01/05/2023 11:44

Spendonsend · 28/04/2023 21:45

It will be interesting if it does impact recruitment. A lot of younger teachers opt out of the TPS because they need every bit of their salary for rent or a mortgage and its an in or out scheme. With a normal pension scheme they can still pay in, but at a lower amount.

I also think some teachers give a private school a go instead of leaving teaching entirely, where obviously they still wouldn't get tps.

Pension is one part of a whole employment package. Perhaps smaller classes, selective intake, salary uplift, access to resources etc would still be enough on balance for some people. But i imagine it would put others off.

I think it probably matters more in subjects where the recruitment pool is small to start with e.g. Maths, Science, MFL as cited on this thread. As you say there are lots of factors, but if you are e.g. a physics teacher who knows you can have your pick of jobs, why not take one that can offer it all?

Lack of TPS is most likely to impact older, more experienced teachers who've been paying in for a long time, too.

It's worth bearing in mind that there are still lots of Private schools in the TPS or who offer very good private pensions, so if the school's pension offering is less good, it's not just a case of private vs state.

Postapocalypticcowgirl · 01/05/2023 11:40

OrangeSofa1 · 28/04/2023 21:31

We still have TPS but new entrants don’t. We have had a language teacher withdraw after finding this out, and have readvertised head of science 3 times now. Seems the maths/science teachers are the most concerned about this, must be their logical brains!

Possibly, or they just have more options to take other offers?

doglover90 · 29/04/2023 13:34

There was a FOI request a while back about teachers' pensions, so there is a publicly available list of schools who have left, but it's somewhat out of date. I would echo the sentiments of the OP.

Ladybowes · 29/04/2023 08:54

I would definitely not consider a school if it had opted out of the teachers pension scheme - people on here who work for private schools claiming it hasn't impacted their recruitment of good teachers (also what do they class as good teachers) are bound to say this. I would like to see independent evidence that this is the case.

I am a teacher so maybe my view is impacted by my bias - but I would never work in a school without a teacher pensions scheme - many of my colleagues feel the same.

Anecdotally I have noticed that private schools are more obsessed about which universities their teachers have attended e.g. Oxbridge - rather than if their teachers are actually trained to teach.

Spendonsend · 28/04/2023 21:45

It will be interesting if it does impact recruitment. A lot of younger teachers opt out of the TPS because they need every bit of their salary for rent or a mortgage and its an in or out scheme. With a normal pension scheme they can still pay in, but at a lower amount.

I also think some teachers give a private school a go instead of leaving teaching entirely, where obviously they still wouldn't get tps.

Pension is one part of a whole employment package. Perhaps smaller classes, selective intake, salary uplift, access to resources etc would still be enough on balance for some people. But i imagine it would put others off.

OrangeSofa1 · 28/04/2023 21:31

We still have TPS but new entrants don’t. We have had a language teacher withdraw after finding this out, and have readvertised head of science 3 times now. Seems the maths/science teachers are the most concerned about this, must be their logical brains!

HDM · 28/04/2023 21:22

I am offered a job in a private school and their employer pension is 3%. I was shocked. Can teachers working in independent schools share their pension paid by employer ?

HDM · 28/04/2023 21:21

I am offered a job in a private school and their employer pension is 3%. I was shocked. Can teachers working in independent schools share their pension paid by employer ?

LetThemEatTurnips · 28/02/2023 06:52

This does not affect state schools as the increase is offset by an increase in their grant. This is not really true, as funding did not cover the pensionincrease, but anyway parents have to pay the extra in independent schools - that is the point of going private.

NeurologicallySpeaking · 28/02/2023 06:48

Oh and all of my SLT would happily discuss this with incoming parents. I have met hundreds and none have asked.

NeurologicallySpeaking · 28/02/2023 06:46

I am SLT in an independent and do all recruitment for teachers. We are no longer in TPS and it has made no difference at all to quality or quantity of applicants. At the beginning maybe, but fewer and fewer independent schools allow incoming staff to join TPS and we are still recruiting very experienced teachers.

Personally wouldn't be a consideration for me. What would be a consideration is quizzing the Head on their plans for 20% VAT increase, if it happens.

beambynum · 27/02/2023 13:22

A fair point but the private school my dc attends doesn't have it and still has plenty of staff as well as new staff hired.

Most of them come in want their own dc on reduced fees and then the school has a good number of years before these teachers leave again.