12 May 2026
Recognition is welcome of the financial challenges TPS creates for HEIs, but the sector needs flexibility to address them. UCEA has responded to the Education Committee’s recommendations on the TPS challenges.
Raj Jethwa, UCEA’s Chief Executive said:
“While UCEA welcomes the Committee’s recognition of the challenges TPS creates for HEIs*, we are concerned that its recommendations fail to address the fundamental lack of fairness.
“Even before the latest rise to nearly 29% HEIs were paying employer contributions of nearly 24%, itself causing financial distress for HEIs over many years. Addressing the SCAPE discount rate methodology may help, but for many HEIs, it is unfair that they are forced to participate in a scheme over which they have little influence, but which has such a substantial impact upon their financial sustainability. Mandated participation in the public service schemes including TPS and LGPS also undermines the position that HEIs are financially independent and outside of government control.
“The report also suggests government could further restrict the autonomy of HEIs. These restrictions would be catastrophic if implemented without greater regulatory flexibility for HEIs to offer alternative pension arrangements. In most cases, the use of wholly owned subsidiaries has been a direct consequence of the lack of flexibility within public scheme pension regulations on the terms in which HEIs participate. Many of the institutions which have set up subsidiaries have been clear that if they had not done so their institutions would cease to exist.
“The only long-term solution is to develop regulation that gives post-92 institutions and conservatoires a level playing field to compete with pre-92 institutions, new entrants and overseas competition. Without this HEIs have to continue to consider alternative options to remain sustainable. UCEA urges the government to implement changes that address the challenges UCEA raised in its position paper**.”
* “The Government should support universities to address the financial challenges caused by the requirement for some universities to offer membership of the Teachers’ Pension Scheme.”
**https://www.ucea.ac.uk/news-releases/20260119/
Notes
In January 2026, UCEA published a Position Paper: Financial Stability in Higher Education: Enabling a Sustainable Approach to Pension Provision arguing that the excessive employer contribution rates paid by HEIs into TPS are exacerbating the sector’s current financial pressures. The mandated use of TPS, which the paper argues offers poor value for money for HEIs, increases the risk of institutional failure and closure. UCEA has been lobbying Government since 2018 for support for member HEIs.
For letters to Government Ministers and more information on our work around TPS see our Public Service Pension Schemes webpage.
The following Education Committee's news release was published on 12 May 2026: “A very serious problem”: No clear government plan for universities risking insolvency, MPs find in new report.
ENDS
For further information: Please contact Andy Fryer, Head of Communications and Membership (a.fryer@ucea.ac.uk) or Armelle Griffin, Communications Officer (a.griffin@ucea.ac.uk)
Recognition is welcome of the financial challenges TPS creates for HEIs, but the sector needs flexibility to address them. UCEA has responded to the Education Committee’s recommendations on the TPS challenges.
Raj Jethwa, UCEA’s Chief Executive said:
“While UCEA welcomes the Committee’s recognition of the challenges TPS creates for HEIs*, we are concerned that its recommendations fail to address the fundamental lack of fairness.
“Even before the latest rise to nearly 29% HEIs were paying employer contributions of nearly 24%, itself causing financial distress for HEIs over many years. Addressing the SCAPE discount rate methodology may help, but for many HEIs, it is unfair that they are forced to participate in a scheme over which they have little influence, but which has such a substantial impact upon their financial sustainability. Mandated participation in the public service schemes including TPS and LGPS also undermines the position that HEIs are financially independent and outside of government control.
“The report also suggests government could further restrict the autonomy of HEIs. These restrictions would be catastrophic if implemented without greater regulatory flexibility for HEIs to offer alternative pension arrangements. In most cases, the use of wholly owned subsidiaries has been a direct consequence of the lack of flexibility within public scheme pension regulations on the terms in which HEIs participate. Many of the institutions which have set up subsidiaries have been clear that if they had not done so their institutions would cease to exist.
“The only long-term solution is to develop regulation that gives post-92 institutions and conservatoires a level playing field to compete with pre-92 institutions, new entrants and overseas competition. Without this HEIs have to continue to consider alternative options to remain sustainable. UCEA urges the government to implement changes that address the challenges UCEA raised in its position paper**.”
* “The Government should support universities to address the financial challenges caused by the requirement for some universities to offer membership of the Teachers’ Pension Scheme.”
**https://www.ucea.ac.uk/news-releases/20260119/
Notes
In January 2026, UCEA published a Position Paper: Financial Stability in Higher Education: Enabling a Sustainable Approach to Pension Provision arguing that the excessive employer contribution rates paid by HEIs into TPS are exacerbating the sector’s current financial pressures. The mandated use of TPS, which the paper argues offers poor value for money for HEIs, increases the risk of institutional failure and closure. UCEA has been lobbying Government since 2018 for support for member HEIs.
For letters to Government Ministers and more information on our work around TPS see our Public Service Pension Schemes webpage.
The following Education Committee's news release was published on 12 May 2026: “A very serious problem”: No clear government plan for universities risking insolvency, MPs find in new report.
ENDS
For further information: Please contact Andy Fryer, Head of Communications and Membership (a.fryer@ucea.ac.uk) or Armelle Griffin, Communications Officer (a.griffin@ucea.ac.uk)
