What should happen to teachers’ pay from 2026?

The School Teachers’ Review Body (STRB) is currently developing its recommendations for teachers’ pay as part of the remit it was set by the Secretary of State in September. The remit this year includes the STRB making recommendations on teacher pay for the next two academic years (2026/27 and 2027/28) and an indicative recommendation for the third year (2028/29), whereas previous remits have focussed just on setting pay for the following year.

This blog lays out the recent trends in teacher pay that provide the context for this year’s pay-setting remit and evaluates the proposed pay award the Department for Education (DfE) has made in its evidence to STRB, particularly in light of the latest economic forecasts and recruitment and retention data. The blog also considers the opportunities and challenges of pay-setting over the longer-term remit. A follow-up blog in the new year will explore what the implications of different STRB recommendations might be for teacher recruitment and retention.

What has happened to teachers’ pay since 2010?

While it is one of many factors that influence teacher recruitment and retention, the level and structure of teachers’ pay certainly matters. Our evidence shows that teachers’ pay rising faster than average outside earnings is associated with better recruitment to initial teacher training, while there is also plenty of evidence that it matters for retention.

Therefore, how teachers’ pay changes in relation to average earnings growth in the wider economy gives a picture of how competitive teacher pay is relative to the past and thereby how it might be influencing recruitment and retention trends.

Figure 1 shows the real-terms growth in the teacher starting salary (purple line) and salary level of experienced teachers (green line) relative to their respective levels in 2010/11. The dotted lines show the DfE’s proposed pay award of a 6.5 per cent increase with higher awards in the later years ^[1]. The blue line shows the growth in average earnings in the wider labour market since 2010/11, with the dotted line showing the Office for Budget Responsibility’s (OBR) latest forecast (from November 2025). The price level is accounted for using a combination of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) and the OBR’s latest forecast of the Consumer Prices Index (CPI).

Figure 1 - Teacher pay has grown more slowly than average earnings in real terms since 2010 

Source: NFER analysis of data from the School Teachers’ Pay and Conditions Documents (2010-2025), DfE Evidence to STRB: 2026 pay award, Office for National Statistics and Office of Budget Responsibility (November 2025).

The chart shows the competitiveness of teachers’ pay relative to average earnings has fallen since 2010/11, which is shown by the gaps between the lines. There have been several pay awards since 2017 that have made larger increases to starting salaries than the pay of experienced teachers. This has resulted in the real-terms value of a starting salary being similar in 2025/26 to what it was in 2010/11, while experienced teacher pay is around nine per cent lower. In contrast, average earnings have risen in real terms over the period, to around seven per cent higher in 2025/26.

The growth in teachers’ starting salaries in real terms is seven percentage points lower than average earnings growth over the period 2010/11 to 2025/26, while the growth in experienced teachers’ salaries in real terms is 16 percentage points lower. If they had kept pace with average earnings growth over the period, the starting salary would have been £2,500 higher in 2025/26 and experienced teacher pay would have been £9,200 higher. This loss in competitiveness is very likely to have contributed to making teacher recruitment and retention more challenging than it otherwise might have been during this period.

What is DfE proposing for teachers’ pay?

The DfE’s evidence to STRB proposes that ‘a 6.5% pay award over 2026/27, 2027/28 and 2028/29 would be appropriate, with the level of awards weighted towards the latter part of the remit’. The Department’s evidence expresses this as a balance between affordability for schools and in the context of improving prospects for recruitment and retention. This month’s initial teacher training (ITT) census data showed that recruitment to postgraduate ITT was 10 per cent higher than the year before and many subjects reached their respective targets, albeit with secondary recruitment overall remaining below target.

At the time of the DfE’s evidence publication, NFER responded by saying that ‘the DfE's teacher pay proposal of 6.5 per cent over three years is the same as the OBR’s current forecast for average earnings growth, suggesting that it would act to maintain pay competitiveness at its current level. While it could help contain the cost pressures facing stretched school budgets, it would be very unlikely to contribute to improving teacher recruitment and retention’.

However, since the evidence was published, the OBR has published a new higher forecast of average earnings growth. As reflected in Figure 1, the OBR now expects average earnings to grow by 7.4 per cent over the three-year period: 3.2 per cent in 2025/26 and 2.1 per cent in the following two years ^[2]. The updated evidence therefore suggests that DfE’s pay proposals are more likely to lead to a further loss of competitiveness and therefore be detrimental contributors to recruitment and retention. Figure 1 shows that the gap in real-terms earnings growth in 2028/29 would likely grow to 8 percentage points for teacher starting salaries and 17 percentage points for experienced teacher pay.

Further, the DfE’s suggestion that the level of award be ‘weighted towards the latter part of the remit’ would mean the path of teacher pay going in the opposite direction to the path of average earnings growth in 2026/27. As shown in Figure 1, this would be likely to result in a wider gap between the trends in teacher salaries and average earnings in 2026/27 before the gap then narrows slightly again. 

While this would, according to DfE, ‘give schools a longer timeframe to plan for changes to their operations, provisions or staffing’ it might also lead to short-term negative effects on recruitment and retention. However, these effects may be quite modest given the magnitude of the changes involved. It is also just one effect among many and likely to be considerably smaller than the impact of a slowing wider labour market (as shown in the increase in teacher training enrolments in 2025), at least in the short term.

Nonetheless, a pay award that makes teacher pay less competitive over the longer-term would be at odds with teacher recruitment and retention being a major Government priority. We will have more to say on what STRB should recommend in part two of this blog, but the latest OBR forecast data strongly suggests that STRB should be looking at pay awards that match or exceed 7.4 per cent over the three-year period to at least maintain competitiveness, rather than 6.5 per cent.

What are the challenges facing STRB in its pay-setting remit?

This year is the first since 2022 that the STRB has been asked to make a multi-year pay award recommendation and it is also making its recommendations much earlier in the year than in previous years. This brings opportunities, challenges and risks that are all important to consider.

The idea of multi-year pay awards has great merit because the greater certainty about future costs will enable schools to plan their budgets and recruitment more strategically. After many years of pay awards being made by the Government in late July, this is a welcome change.

However, greater certainty about future pay awards also presents risks and challenges for pay-setters, as the wider context within which recommendations are made can rapidly change. Indeed, our analysis above has highlighted the relevance of a significant change in the OBR’s economic forecast for average earnings in 2025/26, which is just one year ahead from now. Setting pay for two or three years ahead is fraught with even greater risk: a pay award that is expected to have a particular level of competitiveness may result in a level that is either higher or lower.

To understand the scale of the challenges that uncertainty poses for policymakers, we have analysed previous OBR forecasts and how they compared to the outturn data once it was published, drawing on data back to the OBR’s founding in 2010.

Figure 2 shows the OBR’s latest forecast for average earnings growth (purple line). The ‘fan chart’ shows the level of uncertainty that has been associated with previous forecasts, applied to this forecast. The shaded areas show how different the actual figures could plausibly be, based on the analysis of past forecast performance. The darker-purple area shows the inter-quartile range, i.e. the accuracy level of the most-accurate half of previous forecasts. The lighter-purple area shows the 90-10 range, i.e. the accuracy level of the most-accurate eighty per cent of previous forecasts.

Figure 2 - Forecasts of average earnings growth come with considerable uncertainty, especially further into the future

Source: OBR forecast and NFER analysis of previous forecasts and outturn.

The chart shows that while there is always uncertainty associated with forecasting average earnings in the future, the uncertainty is greater the further out the forecast is made. This means that the STRB should be more cautious about making a set-in-stone pay recommendation for 2027/28 and 2028/29 than for 2026/27, because there is more uncertainty.

Further, while the risk of a significant unexpected event that leads to a sudden increase in average earnings is somewhat low, the chart shows that it is not negligible. Indeed, the Covid-19 pandemic and the cost-of-living crisis offer vivid recent examples of rapid and unexpected economic changes that affect the context for setting public sector pay.

Therefore, it is important to consider the consequences and implications of such events happening. A pay award for 2027/28 that is announced in April 2026 could be affected by an unexpected event in late 2026 that rapidly impacts on pay awards in the wider labour market. While in previous years this could have been addressed in the next pay remit, a commitment to a pay award would mean this could only be addressed retrospectively in the 2028/29 pay award, potentially leaving teachers with a considerable pay competitiveness deficit.

One approach STRB could take is to commit to future pay award recommendations conditional on the remit being re-opened under certain circumstances. For example, it could specify that its recommendation for pay in 2027/28 is conditional on average earnings growth data for the year to September 2026 being below a particular threshold. Then if average earnings rise above that threshold in the meantime, the 2026 remit letter can give STRB the opportunity to revise its recommendation.

Indeed, STRB proposed a similar mechanism when it was last asked to set a multi-year remit in 2022, during the cost-of-living crisis: “we concluded, after careful reflection, that a limited-scope review mechanism is necessary to prevent teacher pay falling behind if average earnings growth is materially higher than expected, and this is therefore an integral feature of our pay recommendation for September 2023”. It would be prudent for STRB to do this again.

Conclusion

Setting teachers’ pay for the next three years is an inviting opportunity to give school leaders much needed certainty over future budgeting. However, it is also fraught with risk for policymakers given the importance for recruitment and retention of at least maintaining competitiveness alongside a volatile economy and wider labour market.

STRB will need to carefully navigate this context with their pay recommendations, ensuring that pay competitiveness for teachers is at least maintained, while providing enough flexibility in future to respond to economic changes.

Footnotes

[1] We have assumed 1.5% in 2026/27 and 2.5% in 2027/28 and 2028/29. This would equate to a 6.6% increase over three years when accounting for compounding, but we are unsure whether DfE’s proposal includes or excludes compounding.

[2] This calculation also does not account for compounding, which would more precisely imply overall growth of 7.6 per cent over the three-year period.

This project has been funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily the Foundation. Visit the Nuffield Foundation website.