Schools set for another hike in pension contributions

Schools set for another hike in pension contributions

The chancellor George Osborne announced yesterday an additional £2 billion of savings will have to be made from public sector pensions – meaning schools face another hike in pension contributions.

The Treasury expects employers to pay more to cover the deficit from 2019/20 onwards.

Julian Gravatt, assistant chief executive of the Association of Colleges, said this rise would be spread across all public sector employers. But about £420 million could have to be footed by Teachers’ Pension Scheme employers.

He said it could cause a rise similar to the level schools had to take on last September when their contributions increased from 14.1 to 16.5 per cent, putting more pressure on already squeezed budgets.

Jonathan Clifton, associate director for the Institute for Public Policy Research, said the hike was a “little noticed move” buried in the Budget.

“The Chancellor has once again promised to protect the headline amount of funding that goes to schools and health, but he is loading more pressure on to these services via the back door.

“These pension changes will fall on all public sector employers – including schools and hospitals – which are meant to be ‘protected’ from spending cuts. They will find it even harder to balance the books in the coming years.”