The number of teachers leaving the Teachers’ Pension Scheme (TPS) has increased by 14% in the last year, new analysis of Department for Education data by financial mutual Wesleyan reveals.
The data – secured through a Freedom of Information (FOI) request – shows that in the 12 months to May 2024, a total of 13,112 teachers opted out of the TPS, an increase of more than 1,600 year-on-year.
The single biggest reason for leaving the TPS was affordability. In the 12 months to May 2024, 9,010 teachers withdrew from the scheme citing personal finance reasons – 69% of total withdrawals, and 7% more than in the previous 12-month period.
Meanwhile, a further 1,240 teachers withdrew from the TPS because they were joining a private pension scheme – 147% more than the same period the year before.
This comes as separate FOI data secured by Wesleyan found that, as of June 2024, more than a third (34%) of all independent schools in England and Wales have withdrawn, or plan to withdraw, from the TPS, amid rising employer contribution rates. More schools left the pension scheme in the first six months of 2024 than in the entirety of 2023.
Darren Mills, Specialist Financial Adviser at Wesleyan Financial Services, said: “While circumstances may mean that more teachers are struggling to keep contributing, leaving the TPS should be a last resort. The TPS is inflation-proofed, guaranteed by the UK government and provides retirement income tied directly to a teacher’s salary. Leaving the scheme can therefore have a significant impact on a teacher’s retirement plans.
“Meanwhile, the rise in teachers switching to private pension schemes likely reflects the fact that increasing numbers of private schools are leaving the TPS amid rising employer contribution rates. Where schools leave the scheme, teachers may be left with no choice but to make alternative pension arrangements. However, these teachers will also be missing out on the range of benefits the TPS brings.
“It’s essential that anyone looking at alternative options – by choice, or by necessity – understands exactly what the implications could be for them.”
Wesleyan’s analysis also found that the number of teachers opting out because they said they were not planning to stay in the UK rose by 33%, year-on-year, to 307.
Darren Mills added: “The fact that a third more teachers are reporting that they’re leaving the TPS because of plans to leave the country should raise alarm bells.
“That’s more than 300 more vacant places in classrooms that will need to be filled, at a time when there’s already a recruitment crisis in education.
“The new government has said that it plans to make teacher recruitment a priority and we need to see a focus on making a career in teaching an attractive option to support recruitment and retention.”
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