2024 is now well underway, and the independent school sector is facing real challenges. One of the most pressing of these is the forthcoming increase in pension contribution costs for teachers in the Teachers’ Pension Scheme (TPS).
Alongside this, many independent schools are also very concerned about the potential for VAT to be added to school fees if there is a change to a Labour government. For those that are reliant on middle-income earners to send their children to them (as opposed to the very wealthy, largely recession-proof families), there is the added risk that such families may decide they cannot afford to pay for their child’s education.
As a consequence, many governing bodies in the independent sector are wondering what to do next to future-proof their schools. Should they come out of TPS altogether? Look at a hybrid arrangement whereby they close entry to all new teachers but retain it for existing teachers, which could run the risk of indirect age discrimination claims? Allow staff to stay in the TPS but with the proviso that they cannot pay any further pay rises or a reduced rate?
Whichever option you are considering, it’s important to consider the risks as well as the benefits of each approach, as these decisions will undoubtedly impact your strategy for the next few years.
