The latest report by the Education Policy Institute (EPI),
explores whether providing more flexibility over teachers'
pensions and remuneration could support improved recruitment and
retention in the profession. EPI collaborated with Teacher Tapp
to survey nearly 6,000 teachers to find out what they want from
their compensation package and how valuable the current Teachers
Pension Scheme is to them.
The report finds that:
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A sizeable proportion of teachers would prefer more
flexibility in their pension plans, with 15% of teachers
willing to trade 20% of their pension income for a 10% salary
increase.Currently, all teachers in state-funded
schools are automatically enrolled in the Teachers' Pension
Scheme (TPS), with average contributions of 9.6% of their
salary. However, the scheme lacks flexibility as teachers
cannot choose their contribution rate or adjust it to suit
their financial needs.
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Younger teachers, particularly those in their
twenties, are two-thirds more likely to trade pension for
salary than teachers in their fifties. Almost 1 in 5
teachers in their twenties would prefer a compensation
package with a 10% salary increase, even if it meant
switching to a DC pension and losing 20% of their retirement
income.
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Teachers who are financially struggling are a quarter
more likely to want to trade pension entitlement for salary
than teachers who are financially comfortably.
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Teachers strongly prefer a guaranteed retirement
income over income dependent on stock market
performance. Our analysis finds that teachers are
22% less likely to choose a pay package tied to stock market
performance over one that guarantees their retirement income.
In fact, they are willing to give up 10% of their salary to
keep that retirement security.
The report recommends that the government should:
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Permit schools to offer pension options: A
substantial minority of teachers prefer to trade some
retirement income for current salary, which is not currently
possible within the TPS. Schools should be allowed to offer
alternative arrangements to their staff, alongside the TPS,
should they wish.
-
Investigate the possibility of providing flexibility
within TPS: The government should review the TPS
with recruitment and retention in mind. It may be that, as
with schemes such as the civil service pension scheme, there
is room to offer more flexibility within the TPS and make
teaching a more attractive profession to more people.
-
Conduct research on policy options: Research
should be conducted into the likely impact and consequences
of various policy options, with the goal of offering a set of
schemes that promote recruitment and retention, while still
ensuring retirement security for teachers.
James Zuccollo, Director for School Workforce at
EPI said:
“Recruitment and retention are the central challenges facing the
teaching workforce and they will not be solved without changes to
teachers' pay package. The 2.8% pay increase recommended by the
Department for Education for next year is less than the current
rate of inflation and will have little impact on the 10% fall in
real pay since 2010. Offering some flexibility over teachers'
pension arrangements will not make up for teachers' falling pay
but it may mitigate some of the damage. The government needs to
be open to innovations in teacher recruitment, and schemes such
as United Learning's proposal should be both welcomed and
carefully studied.”
Background and Methodology
The teaching profession in England is facing significant
challenges in recruitment and retention, with a third of teachers
leaving within their first five years. This threatens education
quality and workforce stability, compounded by a 14% decline in
teachers' real pay since 2010. Fiscal constraints have limited
the government's ability to offer substantial pay rises. While
the government has committed to recruiting 6,500 expert teachers,
this will be difficult without restoring pay parity with similar
professions.
In response, United Learning, a multi-academy trust, proposed to
increase teachers' pay by up to 24% by allowing staff to exchange
some pension contributions for additional salary, without raising
costs. However, unions oppose the scheme and have called for it
to be banned. Last year, EPI and Teacher Tapp surveyed teachers
on their interest in such a scheme.
The report is based on a survey conducted on December 4, 2024,
via Teacher Tapp, with 5,751 usable responses from teachers in
England. The survey presented teachers with choices between
different compensation packages, varying in current salary,
retirement income, and the certainty of retirement income. The
data were then analysed using a statistical model to estimate the
impact of each attribute on the probability of choosing a
compensation package.
