Employer contributions to the Teachers’ Pension Scheme are set to fall by 11 percentage points next year, in a move that is expected to save universities millions of pounds.
Post-92 institutions have long lobbied the government to reduce employer contribution rates to the TPS, which they are legally required to offer. At 28.68 per cent, they argue that employer contributions are well above other sector pension schemes, and have placed an unwelcome financial strain on their institutions.
But the government has now announced that contribution rates will fall by 11 percentage points from 1 April 2027 to 17.68 per cent, just above the 16.4 per cent rate it was in 2018.
Times Higher Education previously reported that contribution rates were expected to fall by 5-10 per cent, but the government has gone further still.
Raj Jethwa, CEO at the Universities and Colleges Employers Association, said the announcement provided “welcome short-term financial relief”, and will reduce pension costs by up to £900 million across universities in England and Wales by 2030.
