This report from the Education Policy Institute, funded by the Gatsby Foundation, examines the current supply of teachers in England, and considers whether reforms to pay policy, particularly at a local level, may lead to improvements in recruitment and retention. 

The pandemic has led to a surge in teacher numbers over the last year – however, there is now a risk that the subsequent economic recovery could result in a large proportion of this new intake leaving for other occupations.

While improvements to the wider labour market after a recession often result in many teachers moving to alternative, higher-paying jobs, the report shows that the the current approach to setting salaries, together with a lack of incentives for teachers to remain in the profession, may only serve to exacerbate future supply problems.

Pay is not the only reason behind teachers’ decision to leave the profession, but the research demonstrates that it can play a pivotal role. Policies such as modest, targeted top-up salary payments are shown to be highly effective at persuading teachers to stay.   

Despite the government acknowledging that the recent boost from the pandemic will only improve teacher numbers in the short term, it has recently removed such top-up payments – a decision which is likely to hinder efforts to retain the recent influx of teachers.

The report also shows that the current design of pay policy for teachers is a barrier to recruitment and retention. It finds that many parts of England struggle to attract and keep hold of teachers due to a large local “pay gap”, with competing occupations offering higher salaries on average – over £5,000 (11%) more in areas around London.

Closing these local pay gaps between teaching and non-teaching jobs is key to improving teacher supply: reducing the pay gap by 10% in the worst-affected regions would result in as many as 720 extra teachers in the local workforce.

However, current policy for teacher pay offers little flexibility and prevents headteachers in these regions from being able to adjust salaries so that they are able to compete with higher-paying occupations.

In order to improve teacher retention as the country emerges from the pandemic, the report calls on the government to review its current pay policy so that teacher salaries are far more responsive to local labour markets – whilst also considering the distributional impact of any reforms.  

EPI also calls on the government to reinstate its policy of additional top-up payments for teachers – both for those who are new to the profession, and existing teachers.


You can read the report in full here.


Key findings and recommendations


The pandemic has boosted teacher numbers, but longstanding recruitment and retention problems likely to return

  • Over the last decade, the teaching profession in England has faced serious retention problems, with teachers across most levels of experience more likely to leave the profession in each successive year since 2010.
  • Early-career teachers have very low retention rates – in 2019, just two-thirds (67%) remained in the profession 5 years after they joined, down from 72% in 2010.
  • However, the Covid-induced recession has provided a temporary boost to the profession. Since March 2020, teacher training applications have increased considerably, leading to the government reaching its overall recruitment target for the first time in 8 years. (Though some subjects such as maths and physics still missed their targets).
  • Teaching typically becomes more attractive to graduates in a recession, as it is largely unaffected during this period, offering stability to workers.
  • But despite this recent surge in teacher numbers, research shows that teachers who were drawn into the profession by a recession are also more likely to leave once the labour market recovers. As a result, while the government has recently made some reforms to boost the status of the teaching profession, it is expected that longstanding supply issues will return in the near future.


Despite acknowledging the risk of a shortfall of teachers after the pandemic, the government has recently abolished policies which are highly likely to encourage retention

  • Evidence suggests that pay can play a key role in teachers’ decision to remain in or leave the profession. While there are other factors which may affect teachers’ career decisions, pay is one that can be altered immediately by a change in government policy.
  • Policies which boost teacher pay in a targeted way can have a positive impact on recruitment and retention. There is strong evidence that top-up salary payments given to those teaching shortage school subjects (such as maths and physics) and in more challenging schools, are likely to significantly improve retention.
  • In 2019, following EPI recommendations, the government introduced new salary top-up payments for new teachers in shortage subjects (£2,000 per year if still teaching 2, 3 and 4 years after training) and for new teachers based in challenging areas of the country (an extra £1,000 per year).
  • However, in response to the current, short-term boost in teacher numbers, the government has since cut these retention payments. This decision could prove costly, as it likely to hinder efforts to retain the large intake of new teaching graduates once the economy improves.
  • To effectively respond to the expected shortfall of teachers in the coming years, the government should urgently reinstate these top-up payments for teachers, and expand them so that they cover existing teachers, as well as those who are new to the profession.


Large local pay gaps are impeding efforts to recruit and retain teachers – they should also be addressed to prevent teacher supply problems returning

  • In some parts of the country, particularly around London, there are significant teacher supply problems, driven by relatively low local pay. Non-teaching occupations in these regions pay higher average salaries than teaching occupations.
  • This is especially the case in areas around outer London. In areas such as High Wycombe and Reading, teachers earn over 11% less on average than non-teaching professionals, which corresponds to about £5,400 less per year.
  • Smaller local pay gaps are associated with fewer supply problems in the profession. Just a 1% reduction in the local pay gap is associated with higher numbers of more experienced teachers in the workforce and fewer vacant teaching posts. The reduction is associated with a 2.6% decline in the proportion of teachers without qualified teacher status (meaning that there are more experienced teachers remaining in the workforce), and a 5% decline in the proportion of vacant posts.
  • In those areas with very large local pay gaps, a larger, 10% reduction in the gap could reduce the number of teachers leaving the profession by 0.5 percentage points each year and increase recruitment by 3.4%. Taken together, this equates to an extra 720 teachers in the local workforce.
  • While in theory headteachers have been granted freedoms to set teacher salaries, in practice, the present system offers very little flexibility because of funding restraints, meaning schools are unable to respond to local labour market conditions and narrow the local pay gap.
  • To improve recruitment and retention and respond to challenges after the pandemic, the government should review its policy on setting teacher pay, so that salaries are more responsive to local labour markets. In doing so, it should take into account both the distributional impact of any changes and the impact on teacher supply.




This report was funded by the Gatsby Foundation. Gatsby is a foundation set up by David Sainsbury to realise his charitable objectives. It focuses support on a limited number of areas: plant science research; neuroscience research; science and engineering education; economic development in Africa; public policy research and advice; the Arts. To read more about its work in Education, please visit: