To ask the Secretary of State for Education, whether her Department has undertaken an assessment of the potential effect of changes to employer national insurance and pension contributions on (a) primary and (b) secondary school budgets.
4 May 2016
The most recent change to the employer contribution rate for the Teachers’ Pension Scheme (TPS) took place in September 2015. At that time the rate was increased from 14.1% to 16.4% of the total pay bill from September 2015. The current employer contribution rate will not change until after the next scheme valuation is complete, which is expected to be in April 2018.
On 1 April this year, the single tier state pension was introduced. Members of previously contracted out schemes will no longer receive a National Insurance rebate. The National Insurance rate for employers has increased therefore by 3.4% for all salary payments between £8,112.01 and £40,040. Based on data from the last scheme valuation this change is expected to add on average 2% to schools’ pay bill, in relation to the TPS, from 1 April 2016.