Guidance

Teachers' pension scheme employer contribution grant: further education providers academic year 2026 to 2027

Updated 10 March 2026

Applies to England

Introduction 

This grant provides funding to further education (FE) providers to cover increased employer contributions to the teachers’ pension scheme (TPS).

It covers:

• the rate change from 16.4% to 23.6% in September 2019
• the increase to 28.6% in April 2024

The funding for this started in the 2019 to 2020 academic year. This guidance confirms the arrangements for the 2026 to 2027 academic year.

Change for 2026 to 2027

From April 2024, institutions reported employer contributions at the 28.6% rate. This has allowed us to simplify:

• the calculation we use to generate your funding allocation
• how we present this information on your funding statement

Read the Calculating and making payments section for full details.

Eligibility

The following types of FE institutions participate in the TPS:

• general FE colleges
• sixth-form colleges
• designated institutions (including the new designated institutions that form part of higher education (HE) provider group structures)
• special post-16 institutions

These institutions will receive extra funding for increased employer contributions in each academic year covered by this grant if:

• they receive 16 to 19 and or adult skills funding for the same period and
• data from the relevant financial year shows they paid into the teachers’ pension scheme

We will treat colleges converting to academies before the start of the payment period as an academy, and they should refer to the  Teachers’ pension scheme employer contribution grant for maintained schools and academies with 16 to 19 provision. We will treat those converting during a payment period as an academy from the next appropriate payment point.

Calculating and making payments

2026 to 2027 academic year 

We will use the 2024 to 2025 financial year audited payments made by providers to Capita for the TPS to calculate funding. 

We will use the employer pension contributions made at a rate of 28.6% to calculate an adjusted annual total that would be the equivalent amount if the 16.4% rate had still applied. We calculate a 16.4% value from the 28.6% value, then uplift both the 28.6% value and the calculated 16.4% value by 5.2% and then again by 3.3%, to reflect estimated average earnings increases in 2025 and 2026 respectively. This calculates the employer contribution values for 2026 to 2027 by accounting for changes in earnings between 2024 to 2025 (source data year from Capita) and the funding year for the grant, 2026 to 2027.

The grant provides funding for the difference between the employer contribution values for 2026 to 2027 at the old calculated rate (16.4%) and the new rate (28.6%).

We use the estimated average increases in earnings from the November 2025 economic and fiscal outlook published by the Office for Budget Responsibility (OBR).

We will pay the funding in 2 separate payments:

• September 2026 for the 8-month period from August 2026 to March 2027, the amount will be 66.67% of the full-year figure
• April 2027 for the 4-month period from April to July 2027, the amount will be 33.33% of the full-year figure

Where institutions have merged, we combine the payments made and associate them with the new institution.

We will confirm payment amounts for institutions that receive 16 to 19 funding alongside their 16 to 19 funding allocation for academic year 2026 to 2027. We will communicate funding amounts for any other institutions by email.