In response to the outcome of the 31 March 2024 valuation of the Teachers’ Pension Scheme (TPS) in England and Wales and confirmation that the employer contribution rate will reduce from 28.68% to 17.68% from 1 April 2027, Raj Jethwa, UCEA CEO, said:
“This reduction will provide welcome short-term financial relief for our member institutions that have a statutory obligation to offer the TPS. However, the magnitude of the reduction simply highlights the inherent volatility in TPS, one of the key challenges institutions face when setting and delivering their business plans. The volatility principally arises from the SCAPE discount rate, derived from long-term GDP forecasts.
Whilst this valuation is expected to reduce the HE sector’s TPS (England & Wales) costs by around £900 million by 2030, that figure is modest compared with the scale of the current government’s policy decisions, which have added around £4 billion* in costs to the sector, alongside further funding cuts recently announced.
Once the reduction comes into effect, the total TPS contribution rate, employer plus employee, will still be around 25-50% higher than alternative DB pension schemes in the sector and uncertainty remains over the direction and magnitude of TPS employer contribution rate changes in the future. This level of uncertainty makes it extremely difficult for higher education institutions to take long-term financial decisions on, for example, courses and staffing levels when such a significant element of their cost base is so unpredictable.
We welcome the Department for Education’s engagement and its stated commitment to understanding and addressing the sector’s challenges. UCEA calls on Government to address the underlying structural inequalities and create a level playing field for post-92 institutions. The sector now needs the Government to act and deliver a sustainable, long-term solution that recognises institutions’ autonomy and supports financial stability.”
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.
On 19 May, Torsten Bell, Minister for Pensions, made an announcement to the Commons on Public Service Pensions: SCAPE discount rate. The Minister’s statement can be found at https://questions-statements.parliament.uk/written-statements/detail/2026-05-19/hcws37
For letters to Government Ministers and more information on our work around TPS see our Public Service Pension Schemes webpage.
ENDS
For further information: Please contact, Armelle Griffin, Communications Officer (a.griffin@ucea.ac.uk), Andy Fryer, Head of Communications and Membership (a.fryer@ucea.ac.uk), or Marc Whittaker, Public Affairs and Events Manager (m.whittaker@ucea.ac.uk)
* The financial impact of government policy decisions on universities
“This reduction will provide welcome short-term financial relief for our member institutions that have a statutory obligation to offer the TPS. However, the magnitude of the reduction simply highlights the inherent volatility in TPS, one of the key challenges institutions face when setting and delivering their business plans. The volatility principally arises from the SCAPE discount rate, derived from long-term GDP forecasts.
Whilst this valuation is expected to reduce the HE sector’s TPS (England & Wales) costs by around £900 million by 2030, that figure is modest compared with the scale of the current government’s policy decisions, which have added around £4 billion* in costs to the sector, alongside further funding cuts recently announced.
Once the reduction comes into effect, the total TPS contribution rate, employer plus employee, will still be around 25-50% higher than alternative DB pension schemes in the sector and uncertainty remains over the direction and magnitude of TPS employer contribution rate changes in the future. This level of uncertainty makes it extremely difficult for higher education institutions to take long-term financial decisions on, for example, courses and staffing levels when such a significant element of their cost base is so unpredictable.
We welcome the Department for Education’s engagement and its stated commitment to understanding and addressing the sector’s challenges. UCEA calls on Government to address the underlying structural inequalities and create a level playing field for post-92 institutions. The sector now needs the Government to act and deliver a sustainable, long-term solution that recognises institutions’ autonomy and supports financial stability.”
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.
On 19 May, Torsten Bell, Minister for Pensions, made an announcement to the Commons on Public Service Pensions: SCAPE discount rate. The Minister’s statement can be found at https://questions-statements.parliament.uk/written-statements/detail/2026-05-19/hcws37
For letters to Government Ministers and more information on our work around TPS see our Public Service Pension Schemes webpage.
ENDS
For further information: Please contact, Armelle Griffin, Communications Officer (a.griffin@ucea.ac.uk), Andy Fryer, Head of Communications and Membership (a.fryer@ucea.ac.uk), or Marc Whittaker, Public Affairs and Events Manager (m.whittaker@ucea.ac.uk)
* The financial impact of government policy decisions on universities
