A “sizeable proportion” of teachers would prioritise an immediate salary increase at the expense of reduced retirement benefits, according to new research.
The research found that 15 per cent of teachers were willing to trade 20 per cent of their pension income for a 10 per cent salary increase.
The Teacher Tapp survey of nearly 6,000 teachers for the Education Policy Institute (EPI), published today, reveals that teachers value a 10 per cent increase in their retirement income only as much as a 6 per cent increase in their current salary.
The polling follows a decision by the country’s largest multi-academy trust, United Learning, to offer an alternative pension scheme last year.
The alternative offers teachers the chance to make lower pension contributions in exchange for more take-home pay.
Teachers’ Pension Scheme lacks flexibility
United Learning CEO Sir Jon Coles said last year a “growing number of staff are opting out of the Teachers’ Pension Scheme because it is too costly for them”.
Currently, all teachers in state-funded schools are automatically enrolled in the Teachers’ Pension Scheme (TPS), with average contributions of 9.6 per cent of their salary.
However, the EPI report says the scheme lacks flexibility as teachers cannot choose their contribution rate or adjust it to suit their financial needs.
The report explains that a substantial minority of teachers prefer to trade some retirement income for their current salary, which is not currently possible within the TPS.
It adds that schools should be allowed to offer alternative arrangements to their staff, alongside the TPS, should they wish.
However, union leaders has warned that teachers should not be forced to choose between pay and pension.
Pepe Di’Iasio, general secretary of the Association of School and College Leaders, said the research illustrates the extent to which teachers’ pay had been eroded.
He said: “Teachers should not be having to choose between a decent pension and decent pay. It should be obvious that they are entitled to both, and it is crucial for the future of the education system that this is the case.
“Considering the erosion of teacher pay over the past 15 years, and the fact this is yet to be adequately addressed, it is totally understandable why some teachers would prioritise a higher salary.
“It is no less than they deserve. But they should not be having to sacrifice pension provision in return and risk being worse off in retirement.”
Paul Whiteman, general secretary of school leaders’ union NAHT, said: “We have seen repeated attempts to chip away at pensions in order to try and solve over a decade of pay erosion. This isn’t right.
“Pensions represent salary deferred as a long-term investment to provide future security. Insufficient pay in the teaching profession should not be resolved by trading future pension income and security in favour of current income.”
Younger teachers more likely to trade pension for salary
The survey, carried out in December last year, found that younger teachers, particularly those in their twenties, are two-thirds more likely to trade pension for salary than teachers in their fifties.
Almost one in five teachers in their twenties would prefer a compensation package with a 10 per cent salary increase, even if it meant switching to a direct contribution pension and losing 20 per cent of their retirement income.
Teachers who are financially struggling are also a quarter more likely to want to trade pension entitlement for salary than teachers who are financially comfortable.
Finally, the analysis finds that teachers are 22 per cent less likely to choose a pay package tied to stock market performance over one that guarantees their retirement income. Rather, they are willing to give up 10 per cent of their salary to keep that retirement security.
The EPI recommends that the government review the TPS with recruitment and retention in mind.
“It may be that, as with schemes such as the civil service pension scheme, there is room to offer more flexibility within the TPS and make teaching a more attractive profession to more people,” it says.
It also wants research into the likely impact and consequences of various policy options, with the goal of offering a set of schemes that promote recruitment and retention, while still ensuring retirement security.
Recruitment and retention challenges
James Zuccollo, director for school workforce at the EPI, said: “Recruitment and retention are the central challenges facing the teaching workforce and they will not be solved without changes to teachers’ pay package.”
He added that offering some flexibility over teachers’ pension arrangements will not make up for teachers’ falling pay but it may mitigate some of the damage.
“The government needs to be open to innovations in teacher recruitment, and schemes such as United Learning’s proposal should be both welcomed and carefully studied,” Mr Zuccollo said.
The DfE has been approached for comment.
The EPI research was funded by Lord Nash, Lord Fink and Barnett Waddingham, a UK professional services consultancy.
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