Teacher Pay Deal
England Unveils Multi-Year Teacher Pay Deal with £1.8bn Funding Amid Union Criticism
Key Points
The School Teachers' Review Body had recommended a 6.5% pay rise across 2026/27 to 2028/29, but the government’s package provides 3.5% from September 2026 and 3% from September 2027 instead.
The £1.8 billion funding package to support the pay rise is not all upfront: £700 million is allocated for 2026-27 and £1.1 billion for 2027-28 to cover the award, with the remainder drawn from existing budgets.
Colleges and other FE providers will receive about £485 million over two years, with £120 million for 2026-27 and £365 million for 2027-28; funding distribution via the 16-19 funding formula is unclear and has been criticised for disadvantaging some colleges, alongside a reported pay gap of around £12,500 between school and college teachers.
From April 2027, employer contributions to the Teachers’ Pension Scheme will fall after the 2024 revaluation, with employer contribution grants reduced but the value of the pension scheme protected for current and retired teachers.
England's teachers will receive a 3.5% pay rise from September 2026, followed by a further 3% from September 2027, the government confirmed on July 1. The two-year deal is backed by £1.8 billion in extra funding — £700 million for 2026-27 and £1.1 billion for 2027-28 — according to GOV.UK.
The award brings the cumulative teacher pay rise to 17% since the 2024 general election, Education Secretary Bridget Phillipson told Parliament. But unions are threatening a strike ballot, arguing the deal leaves schools to plug a significant funding gap on their own.
Schools Must Find Cash to Cover First 1%
The government will not fully fund the award. Schools must cover the first 1% of each year's rise from their own budgets. The NEU estimates this costs £460 million — enough to pay around 8,300 members of staff. General Secretary Daniel Kebede said schools are being asked to find that money from "budgets already at breaking point," according to The Guardian.
NAHT General Secretary Paul Whiteman called the arrangement "deeply unhelpful," warning that "there is very little headroom" left in school finances, The Independent reported. The government says it is providing budget certainty and that the deal shows "the immense value we place in our teachers."
Deal Falls Short of Review Body's Recommendation
The independent School Teachers' Review Body had recommended a 6.6% rise across two years. The government's package delivers 6.5% over the same period — but spread as 3.5% then 3%. The Guardian reported that the STRB's figure was actually slightly above the DfE's own original three-year proposal of 6.5%.
With May 2026 CPI inflation at 2.8%, according to Reuters, the 3.5% award for this year is a real-terms pay rise. But if inflation stays above 3% next year, the second tranche could lose its value. Average teacher pay is projected to reach £54,400 by 2027, up from roughly £46,500 in 2024.
Cap on Academy Executive Pay Signals New Controls
Alongside the pay deal, the government announced tighter controls on academy trust executive salaries. Any role paying more than £174,000 will require DfE approval. Schools Minister Georgia Gould said pay must be "proportionate and justifiable," bringing it in line with NHS standards, Schools Week reported. Some academy CEOs currently earn over £500,000 — more than the Prime Minister.
Trust leaders pushed back. Leora Cruddas of the Confederation of School Trusts called the approval process a "slow, bureaucratic" system that could harm leadership recruitment at large multi-academy trusts, according to The Guardian. The cap applies to more than 1,000 academy trusts across England.
Colleges Get £485 Million But Pay Gap Persists
Further education colleges and providers will receive £485 million over two years — £120 million in 2026-27 and £365 million in 2027-28 — to help match the school teacher pay rises, according to WiredGov. The money flows through the 16-19 funding formula, which critics say disadvantages some colleges.
A pay gap of around £12,500 still separates school teachers from college teachers. Analysts say this structural gap remains a barrier to quality in vocational education. Meanwhile, employer pension contributions will fall from April 2027 following a 2024 revaluation of the Teachers' Pension Scheme, which will free up some central funding but reduce contribution grants to schools.
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