Government announces 6.5% teacher pay rise but schools must shoulder some of the cost

Teacher pay rise confirmed

School teachers and leaders are set to see their pay increase by 6.5 per cent over the next two years. This decision comes after the education secretary accepted the School Teachers Review Body’s pay recommendations in full yesterday [Wednesday, 1 July].

Teachers are expected to receive an increase of 3.5 per cent from September 2026 followed by a further three per cent from September 2027. This means a cumulative 17 per cent rise will have been delivered since the general election in 2024.

Altogether, the government has promised to invest £1.8bn in schools over these next two years. It says this will support pay rises for hard working teachers and support staff.

However, schools won’t receive funding to cover the entire pay rise. They are expected to absorb the first one per cent of each annual pay award from their existing budgets. The government suggests schools shoulder this cost by making savings or becoming more efficient.

Academy executive pay faces tighter controls

The government intends to limit very high salaries for academy trust chief executives and senior leaders. It argues that more education funding should go into schools and classrooms rather than top executive pay packets.

From September, trusts will need to seek government approval before advertising roles over £174,000. The government says this will bring the sector in line with other public sector workforces including the NHS and colleges. Annual increases for executives are also set to be brought in line with the wider school workforce.

Education secretary, Bridget Philipson, said:

“Our brilliant school and college teachers go above and beyond every day, and I’m determined that dedication is not just recognised, but rewarded.

“This multi-year deal, backed by significant additional investment, shows the immense value we place in our teachers, while giving schools and colleges certainty over pay and their budgets.

“It’s also right that classroom teachers are not seeing executive pay rise faster than their own – or set at excessive levels in the first place – so tighter controls will mean unjustifiable exec salaries become a thing of the past, helping level the playing field for school staff and drive every pound towards classrooms.”

Recruitment and retention figures improve

Since 2024, there has been more than 4,500 additional teachers in secondary schools, special schools and colleges. This means the government has already achieved over 70 per cent of its target to recruit 6,500 new teachers, with three years still remaining.

Figures also show that fewer school teachers are leaving the profession. There has been a 13 per cent rise in the number of people choosing to train to teach this year – a post-pandemic record.

The government says this new move will push the average school teacher salary to over £52,800 from September 2026. It claims teachers’ annual pay will then rise to over £54,400 from September 2027.

The government also says that £485m will be provided to colleges and other further education providers over the next two years. It believes this will support the continued recruitment and retention of excellent teachers. Ultimately, the government claims this will allow further education providers to deliver high quality vocational, academic and technical courses.

Funding pressures remain a concern

The government says its Maximising Value for Pupils programme will play a vital role in supporting schools to get the best value from their budgets. The programme claims to offer better deals on areas like energy, recruitment, and banking. Bishop Hogarth Catholic Education Trust in Darlington has already noticed benefits. The trust has increased its annual interest income from £16,000 to over £1.1 million by reviewing its banking arrangements.

Commenting on this announcement, Jack Worth, education workforce lead at NFER, said: 

“Today’s teacher pay award is a welcome boost for teachers and could help improve retention since it is above current forecasts of inflation and earnings growth in the wider labour market. However, its longer-term impact on teacher recruitment and retention remains uncertain, as the full implications of the Iran conflict for inflationand wages have yet to feed through into the economy. Inflation and rapidly rising wages could eventually erode the benefit of this uplift.

“If inflation rises further, schools could face additional cost pressures, making it more difficult to absorb the one per cent contribution from existing budgets, particularly if there is no further increase in government funding.

“Additional funding and clarity for 2027/28 will also be welcome for school leaders. Also, the £480million of additional funding for further education is a positive step in recognising the pressures facing the sector.

“However, the expectation that schools will, on average, fund the first one per cent of the award will add further pressure to already stretched school budgets, and some schools could face even higher costs depending on their individual circumstances.”

While the announcement marks a significant investment in the education workforce, questions remain over whether schools can absorb their share of the costs without further pressure on already stretched budgets.