Pensions advice for independent schools

Why consider your options now?

• Manage the risk of further cost increases – TPS costs increased by 5% in April 2024. This was the latest in a series of increases and does not result in improved benefits for teachers. Schools are effectively paying more for teachers to get the same benefits. There's a risk of further increases in the future so schools should assess whether TPS continues to represent good value for money.
• Minimise the impact of VAT increases on fees – the General election will take place on 4 July and changes to VAT could take place soon after. Many schools are concerned that passing the full impact of VAT on to parents in the form of higher fees will have a detrimental effect on pupil numbers. Pension contributions are a material cost that schools can control. A change in pension strategy could therefore generate cost savings that would minimise the fees increases needed to balance the books.
• Recruitment and retention impact is now lower - the risk of being an early mover has disappeared and, in our experience, retention and recruitment has not been adversely impacted for schools that have exited.

How we can help

We advise over 100 third sector and charity clients, including independent schools. We have successfully guided many of our independent school clients through a TPS exit, right through from the business case to consultation and final implementation.

How do you run a successful consultation?

If you decide you want to develop a proposal for exiting TPS, or make other changes to manage pension costs, it’s crucial to get that proposal and the accompanying consultation process right. From our experience of working with schools, we outline the key milestones and outcomes from a successful TPS exit that we implemented in 2019.