Teachers' pensions costing taxpayers £1bn a month
Retired teachers receive more than double the money that is spent on school students every year, official figures show.
Spending per pupil was £7,460 in England and £7,327 in Wales during 2023 to 2024, but retirees in the Teachers' Pension Scheme were handed an average of £16,600 for the same period.
The cost of payments to retirees has since soared past £1bn a month, while taxpayers will fund another £9bn of payments into current teachers' pensions this year.
It comes as the Government's decision to charge VAT on private school fees is expected to raise £1.5bn in 2025 to 2026.
Members of the Teachers' Pension Scheme are mostly teaching staff from mainstream schools, but some work in participating independent schools, further education and higher education.
When they retire, they are guaranteed an income for life that rises annually with inflation.
According to its annual report, the scheme paid £11.3bn to 681,000 retired teachers across England and Wales in 2023 to 2024. A further £559m was paid as part of 83,000 pensions to dependants.
The report also suggests that current teachers will receive £8.8bn in pension contributions during 2024 to 2025.
This would be an increase of almost £2bn compared to the previous year after schools were forced to increase contributions from 23.6pc to 28.6pc to meet the scheme's spiralling costs.
Liz Emerson, of the charity Intergenerational Foundation, said students were losing out and that politicians should be honest about the cost of public sector pensions.
She said: 'Economists have long warned that over-generous pension promises made in the past would come home to roost. The result is that today's students are losing out on education spending and resources for their generation as budgets are diverted to pay these annual pensions.
'Furthermore, a double whammy is at work because many of these pensions will be for private school teachers whose pension contributions were topped up not by their schools but by the general taxpayer during their working lives.
'Intergenerational unfairness in the pension system will not stop until politicians tell the truth about the hidden iceberg of liabilities looming below the surface in most public sector pension schemes.'
Government figures also show that since July, the amount paid for retired teachers' pensions has exceeded £1bn a month.
Like others in the public sector, they are funded on a pay-as-you-go basis, meaning contributions are not invested to pay future pensions.
Instead, payments to retirees are made from general taxation and the contributions coming in.
However, the rising cost of the Teachers' Pension Scheme is already forcing some schools to withdraw, which could lead to less money coming in – and a larger shortfall for taxpayers to plug.
United Learning, the UK's largest academy chain, is already offering teachers higher salaries to opt out of the scheme, while around 400 private schools – which do not legally have to offer membership – have already closed it to new staff or left altogether.
Teachers at some private schools have gone on strike after their employer threatened to fire and rehire them unless they withdrew in a desperate attempt to cut costs.
A Department for Education spokesman said: 'Teachers are at the heart of the Government's mission to break down barriers to opportunity – there are 680,890 retired members of the Teacher Pension Scheme who have dedicated their careers to teaching children, ensuring that they can achieve and thrive.
'The pension in payment to a retired teacher is based on their entire career – they deserve to receive the benefits that they have accrued and a guaranteed income in retirement is one of the rewards for teaching.
'The Teacher Pension Scheme remains one of the most generous pension schemes available and is a key part of the recruitment and retention of the best and brightest teachers.'
The National Education Union was approached for comment.
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