More teachers to opt out of pension scheme, ATL warns

The Association of Teachers and Lecturers (ATL) has warned that more teachers are expected to opt out of the teachers’ pension scheme after changes to pension programmes were announced in the Budget.

The union claimed that while the number of teachers opting out has ‘plateaued’, experts are cautious about future numbers, as the level of non-contributors is still significantly greater than five years ago.

Usman Gbajabiamila, pensions policy adviser at ATL, said: “There is some stability in it now – the changes have gone through and the scheme’s a year old, and members have calmed down a bit. What freaks people is uncertainty. Even if the changes are positive, if you’re not certain where your money’s going people say ‘I’ll put my money where I’m more confident’.”

Initially, the flat 6.4 per cent contribution rate was replaced with a tiered system where the highest earning teachers put 11 per cent of their wages into their retirement pots. However, by February 2015, there had been a 42 per cent increase in the number of teachers opting out of this contribution.

Data from ATL showed that newly qualified teachers are still most likely to pull out, particularly those living in London.

Valentine Mulholland, policy adviser at the ATL, said: “We are likely to see an ongoing upward trajectory. The pay framework is being dismantled. We’re expecting another four years of zero per cent increase in pay, although that’s not the level of inflation.

“And while schools should be applying a one per cent increase to teachers climbing the pay scale, the government has now said any increase should be related to performance. We’re very concerned, the existing [pension contribution] increase has already put enormous pressure on schools and directly goes on to pay roll costs. This will worsen that.”