More than a quarter of teachers aged under 30 would take a higher salary now in exchange for a less generous pension, a survey has found.
Schools Week revealed last week the country’s biggest trust will offer teachers the choice of an alternative pension scheme from 2025.
It sparked unions to threaten strike action and calling for government to intervene, as well as a sector-wide debate about the merits of the plan.
A Teacher Tapp poll of 10,684 teachers has now found one in five (19 per cent) overall would “prefer a higher salary now with a lower pension in the future”. However 59 per cent said they would not.
But those in favour of such a deal rose to 28 per cent for teachers in their 20s, and 21 per cent for those in their 30s.
This contrasts starkly to just 14 per cent of educators in their 40s and 11 per cent of those aged 50 and over.
Under United Learning’s plans, staff would all still be auto-enrolled onto the generous teachers’ pension scheme (TPS).
But those who want to take up an alternative pensions offer, in exchange for more pay, could opt out. Under the new pension plan, United Learning would still contribute at least 10 per cent in employer contributions.
Currently, employers pay 28.68 per cent of salary into the TPS. Money saved from this will be used to boost salaries, potentially rising up to £45,000 for new teachers in inner London and £38,000 elsewhere.
The move has put United Learning on a collision course with the teaching unions, which have urged education secretary Bridget Phillipson to intervene.
They claim the move could “threaten” the public sector pension scheme’s “stability and long-term future”, a view contested by many others.
United Learning chief executive Sir Jon Coles says teachers should be given the choice. He thinks the move could attract new graduates to the profession and help teachers save for a house deposit.
How many teachers opt out of TPS?
Coles thinks the alternate pension scheme may be attractive to the one in 10 teachers aged under 40 at United Learning who have already opted out of the TPS due to its costs. They currently have no alternative pension.
In July 2023, Teacher Tapp said two per cent of teachers, based on 8,951 respondents, were currently opted out of the TPS. Six per cent reported they had opted out previously.
But teachers are not confident in their understanding of pensions.
When asked in 2022 if they were aware of the impact on their pension of a change in work – for instance reducing hours or taking maternite leave – over a third did not know. Just 12 per cent knew “exactly” the impact.
And there are wider concerns about retirement.
In 2021, 33 per cent of surveyed teachers told Teacher Tapp they did not fell confident at all that they were financially prepared for retirement.
However some 39 per cent felt ‘somewhat confident’ about their preparedness and 21 per cent were ‘confident’.
Currently, teachers have to pay between 7.4 and 11.7 per cent in pension contributions to the TPS. Employers must pay 28.6 per cent of the teacher’s salary.
Under United Learning’s plan, teachers who wanted to opt out of the TPS would be able to contribute either 0, 5 or 10 per cent of their salary in a new defined contribution scheme.
The trust would contribute at least 10 or 20 per cent.
For teachers contributing nothing towards their pension and getting 10 per cent from their employer, this would equate to a 15 per cent salary uplift.
