Teachers pay to rise by 3.5% this September and curbs to be placed on executive pay

Education Secretary Bridget Phillipson has confirmed a multi-year teacher pay award, additional school funding and new controls on academy trust executive pay. The announcements were set out in a letter to school leaders and teachers on 1 July 2026. The Department for Education (DfE) press release can be viewed here: Teachers to benefit from multi-year pay deal - GOV.UK

Teachers’ pay

The Government has accepted the School Teachers’ Review Body recommendations in full, resulting in pay increases of 3.5% from September 2026 and 3% from September 2027. As with the 2025-26 pay award, schools will be expected to fund 1% of the staff pay awards from existing budgets, with the Government acknowledging the challenges that this is likely to present for many schools. Daniel Kebede, General Secretary of the National Education Union (NEU), said: “let us be clear: a partially funded settlement still means cuts to education, and the NEU will never accept that.” It is reported that the NEU is considering its options regarding industrial action.

Recognising the financial implications of these pay awards, the Government has announced £700 million additional funding in 2026-27 and £1,115 million additional funding in 2027-28. 

To help schools manage budgets, the DfE is expanding several initiatives designed to deliver savings through collective purchasing and procurement including DfE Energy for Schools, which the DfE says can save a typical primary school £4,900 and a secondary school £23,200 per year, and the Supply Teachers and Education Recruitment framework, which the Government says will cap agency margins and cut supply staffing costs by 5% to 24%.

Executive pay

The Secretary of State also announced measures which the Government says are aimed at ensuring executive pay remains transparent and proportionate. From 1 September 2026, executive pay in academy trusts will not increase faster than teacher pay and academy trusts seeking to advertise a new executive position paying than £174,000 will require government approval before doing so. The move aligns academy trust executive pay arrangements more closely with those already in place across sectors such as the NHS and further education. However, concerns have been raised regarding the Government limiting an academy trust's flexibility to make decisions about recruitment and retention of executive leaders.

Other workforce measures

Beyond pay, the Government is introducing several measures intended to improve working conditions:

• Schools will be able to offer ‘modest’ non-consolidated recognition payments to staff.
• Greater flexibility will be introduced around INSET days.
• Additional clarification will be provided to protect leaders' work-life balance, including:
  • Genuine breaks from work.
  • Protected time off during weekends and public holidays.

Teachers’ Pension Scheme changes

The letter also confirmed that from April 2027, employer contribution rates to the Teachers’ Pension Scheme will decrease (to 17.6% down from 28.6%) following the latest valuation of the scheme. This is expected to reduce pension costs for employers and maintain pension benefits for scheme members. However, the DfE confirmed that there will be ‘corresponding adjustments’ in school funding arrangements, with further details to be announced, indicating that there may be no overall cost saving for schools.

The DfE scheduled a live online event on 2 July 2026, to discuss the announcements and answer questions from the sector.