The cost of living crisis has helped fuel a 77% rise in the number of teachers quitting the Teachers Pension Scheme over the past year.
According to new data, the number of teachers opting out of the Teachers’ Pension Scheme (TPS) because they cannot afford to continue contributing has risen by more than two-thirds.
Figures from the Department for Education, analysed by financial services mutual Wesleyan, revealed that 9,199 teachers across the UK left their pension scheme for personal financial reasons between April 2022 and March 2023 – 77% up on the same period in the previous 12 months.
The data suggests that opt-outs because of affordability accounted for nearly three-quarters (72%) of all cases of teachers leaving the TPS between April 2022 and March 2023 (9,199 out of a total 12,824), up from 64% the year before (5,193 out of a total of 8,106).
Separate research from Wesleyan also revealed that two in five teachers expect their financial situation to deteriorate over the next 12 months.
The Teachers Pension Scheme has been considered as one of the best public sector pension schemes.
Wesleyan’s financial services arm provides specialist financial advice and products for doctors, dentists and teachers.
Linda Wallace, director of Wesleyan Financial Services, said: “These stark findings could indicate the makings of a retirement income crisis within the teaching profession, if teachers are leaving their pension scheme without plans for – or the ability to – keep saving towards their future.
“While circumstances may mean that more and more teachers simply can’t afford to keep contributing, leaving the TPS should be a last resort if there is any choice as it is an extremely valuable benefit.
“It has the major advantage of being index-linked, which helps protect it from future increases in the cost of living and guarantees retirement income that is directly linked to a teacher’s salary. Any pension alternative that teachers might look to replace it with is likely to be far less generous.
“We’re urging anyone who is thinking about potentially leaving the TPS, or re-thinking their retirement plans, to first seek professional advice.”
• Data provided by the Department for Education was in response to a Freedom of Information request submitted by Wesleyan, received on 9 May 2023. Customer data was drawn from a Wesleyan survey of 302 customers who are teachers, conducted in January 2023.
