In 2024, 177 schools withdrew or partly withdrew from the TPS, which is a generous pension scheme that gives staff a guaranteed annual income in retirement.
Julie Robinson, chief executive of the Independent Schools Council, said the sector was already dealing with increased costs for keeping staff in the TPS, and extra tax rises – including the new VAT policy and rise in national insurance (NI) – made remaining in the scheme “unaffordable” for many.
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Read MoreThe scheme is more generous than the defined contribution schemes offered by most employers in the private sector.
This figure has risen from 16.48 per cent back in 2018 and 23.68 per cent in 2024, and while state schools received funding for the increased costs, private schools did not.
From April, the schools will also face higher rates of employer NI – rising from 13.8 per cent to 15 per cent from April – after a change announced in October’s Budget.
“In these circumstances, schools are having to look at every level of their cost base and make difficult decisions. While the first preference for schools would be to remain in the TPS, for an increasing number of schools, this is simply unaffordable.
But financial experts have said teachers’ retirement plans will be disrupted by their schools withdrawing from the TPS.
“The TPS offers benefits that will be nearly impossible to replicate in private pensions – from inflation-proofing to providing retirement income that’s tied directly to salary. As a result of school withdrawals, teachers are having to scrap plans that may have been decades in the making, or switching to less generous, or less certain pension alternatives.
Last year, 54 schools entirely withdrew from the TPS, meaning all their staff were pulled from the scheme and moved into an alternative one, while a further 123 started a phased withdrawal, where new staff do not enter the scheme, but current staff remain within it.
A Government spokesperson said: “Through our Plan for Change we are determined to break down the barriers to opportunity children face, driving high and rising standards across education. Our teachers are integral to that mission.
“Private schools participate in the Teacher Pension Scheme voluntarily and are free to leave at any time.”
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