The number of independent schools opting out of the Teachers’ Pension Scheme (TPS) increased by more than a third (34 per cent) in the past six months.

A freedom of information request by Wesleyan revealed that 27 schools notified the Department for Education of their intention to withdraw from the TPS since employer contributions were increased by 40 per cent in September 2019.

Since the increase in contributions were first announced in September 2018, 107 independent schools have left the scheme.

In the announcement, the government said that it would support state schools and further education colleges with extra funding, while private schools and higher-education institutions would have to self-fund the increase in employer contribution rates.

Commenting on the findings, Wesleyan advice policy consultant, Parminder Gill, said: “The news that 107 independent schools have opted to leave the TPS is a concerning statistic.

“Independent schools are having to look more closely at their budgets, and examine options like increasing fees, to establish if they can afford to maintain their membership of the TPS. For some, the numbers simply don’t add up.

“When the 40 per cent increase in contributions took effect in September last year, some independent schools adopted a wait and see approach, but now many are deciding to walk away from the scheme all together.

“We have seen an increase in demand from schools who want to give their staff transparency about the situation. If an independent school withdraws from the TPS, it is essential that teachers understand what this means for them and their long-term retirement plans.

“While retirement may feel like a long way off for some, it is worth noting that very few schemes will be as generous as the TPS because it is guaranteed retirement income, directly linked to a teacher’s salary and service with clear employer and employee contributions outlined.

“Contributions and retirement income of alternative schemes that many teachers will be exploring are less certain and can add more complexities to retirement planning.”

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