Changes to pay and pension contributions backdated to April 2015

As of April 2014 those at the top of the classroom teacher payscale were paying a pension contribution of 9.5%. When the new tiered contributions were introduced in April 2015 the bandings meant that the pension contributions for those at the top of the payscale i.e. up to £34,999 dropped to 8.7%. However, with the backdated pay increase, these members will have jumped back into the tier whose contributions are now 9.7% i.e. from £35,000 to £41,499. This means that any backdated pay will be offset by the backdating of extra pension contributions.

The tiered contributions were agreed by the teachers’ side of the SNCT to ensure that those at the lower end of the payscale paid less and those at the top paid more. If this had not been agreed the flat rate, paid by everyone, required to maintain the value of the pension fund would have been 9.6%.

As with all pension increases the tiered bandings will move each April in line with the CPI rate set on the previous September. Please note that CPI in September 2015 was negative so there will be no change in the tiered bandings in April 2016.

Changes to National Insurance Contributions from April 2016

At the moment, if you are a member of your employer’s pension scheme, you pay a 1.4% lower (contracted out) rate of National Insurance contribution on earnings between £112 and £155 per week. This means that you are not currently entitled to the higher rate state pension. However, from April 2016, contracting out is ending and you will pay the full National Insurance contribution, this means you will start to accrue benefits in the new single tier state pension from that date.