FE Retention Payment Explained: Targeted Retention Incentive

Two schemes, one name

On 4 September 2024 the Department for Education published two pieces of GOV.UK guidance with almost identical titles. One was "Targeted retention incentive payments for school teachers". The other was "Targeted retention incentive payments for FE teachers". They are administered through the same claim service, they replaced similarly named predecessor schemes on the same day, and they are frequently written about as though they were one thing with two audiences.

They are not. They are two schemes that share a brand. Almost every substantive rule differs, and the differences run in both directions — the FE scheme is more generous in some respects and narrower in others. Getting the wrong one is not a harmless approximation: a construction lecturer who reads the schools guidance will conclude they are ineligible because their subject is not on the list, and a maths teacher in a secondary school who reads the FE guidance will fail the institutional test without understanding why.

The one place the two schemes genuinely touch is the 16-to-19-only academy or school. Institutions of that kind sit inside the FE scheme, not the schools one — and the schools guidance says so explicitly, directing teachers employed by a 16-to-19-only academy or school to check their eligibility for the further education version instead. If you teach exclusively post-16 in something that calls itself an academy, that signpost is the one that matters.

The seven eligible subjects

The eligible list, as published by the Department for Education, is:

• Building and construction — no schools equivalent.
• Chemistry — also in the schools scheme.
• Computing, including digital and information and communication technology — also in the schools scheme.
• Early years — no schools equivalent, and the entry that most often surprises people.
• Engineering and manufacturing, including transport engineering and electronics — no schools equivalent.
• Maths — also in the schools scheme.
• Physics — also in the schools scheme.

That list did not change between round one and round two. The interim evaluation confirms the round one subjects were identical to the round two subjects, which is useful to know if you are reconstructing whether you should have been eligible for a closed round.

The three FE-only entries tell you what the scheme is actually for. The schools list is a list of academic shortage subjects — the four where secondary recruitment has been persistently worst. The FE list is a list of sector shortage areas, and its logic is competition with industry rather than competition between subjects. A qualified electrician, a site manager or a software developer can earn considerably more outside further education than in it, and the construction, engineering and computing entries are aimed squarely at that problem.

Early years is the interesting one, because it is not a high-earning alternative career. It is on the list because early years is a sector-wide workforce shortage in its own right, and colleges are where the workforce is trained. A scheme designed to protect the supply of early years educators has to protect the supply of people who teach early years courses first, which is a policy logic that simply has no analogue in the schools list.

How much you get, and why

The payment is determined by two factors in sequence. First, your average weekly timetabled teaching hours set your band. Second, your provider's disadvantage level sets your position within that band.

Within your band, the DfE's guidance says that if you teach at an FE provider with a higher proportion of disadvantaged students, you will receive a higher payment. The measure was calculated from the proportion of 16 to 19 students attracting disadvantage funding in the 2022/23 academic year, on the basis of economic deprivation or low prior attainment in English and maths, and the Department publishes a spreadsheet listing eligible providers alongside their payment values. As with the schools scheme, the right way to check is to look up your employer on the published list rather than to reason from how disadvantaged your intake feels.

One further point on the amount: holding a teaching qualification is a pass or fail eligibility gate in the FE scheme, not a modifier on the payment. You do not get more for being qualified, and there is no regional adjustment of any kind. The average gross cost of an award in round one was around £8,300 against an average net award of £5,700, which gives a sense of how substantial the tax gross-up described below actually is.

The eligibility gates in full

There are several tests and you must pass all of them. These are the round two rules, as published for the 2025/26 academic year.

• Career stage. You must be in the first five years of your FE teaching career, operationalised as having started your first role with FE teacher responsibilities at a post-16 provider in England during or after the 2021 to 2022 academic year. Starting in 2020/21 or earlier excludes you.
• Direct employment. You must be employed directly by the provider — not through a subsidiary, an agency, a contractor or a subcontract.
• Contract type. Permanent, or fixed-term covering the full academic year, or variable-hours or short-term fixed-term provided you had worked the full spring term before applying.
• Minimum hours. At least 2.5 hours a week of timetabled teaching.
• Subject and level. At least 50% of your timetabled hours teaching eligible subject courses at Level 3 or below.
• Learner age. At least 50% of your timetabled hours teaching 16 to 19 year olds on study programmes, T Levels or 16 to 19 apprenticeships.
• Teaching qualification. You must hold one, be enrolled and working towards one, or intend to enrol within 12 months.
• Conduct. You must not be subject to formal performance measures as a result of poor teaching, or to disciplinary action.
• Intention to stay. You must expect to remain at the provider to the end of the academic year.
• No double claiming. You cannot claim if you have already claimed for the same academic year, or if you are receiving an FE initial teacher education bursary for that year.

The two 50% tests are the ones that catch people out, because they are separate and cumulative. A construction lecturer whose timetable is mostly Level 3 construction but mostly adult learners fails the second test. A lecturer teaching mostly 16 to 19 year olds but mostly at Level 4 fails the first. In a sector where mixed timetables spanning ages and levels are entirely normal, it is worth actually counting your timetabled hours rather than assuming.

The teaching qualification gate deserves a second look, because it is unusually accommodating and reflects something real about how people enter further education. The route into FE teaching is frequently a mid-career move from industry, with the qualification acquired in service — what the sector calls the dual professional. A scheme that required a qualification up front would systematically miss exactly the people it is trying to keep. Permitting an intention to enrol within 12 months is a deliberate design choice, and it is a meaningful difference from the schools scheme, which requires QTS or QTLS at the point of claim.

Which providers count

Eligibility is restricted to the statutory further education sector. Eligible providers are FE colleges, sixth form colleges, designated institutions, and 16-to-19-only academies and schools.

Adult community education is also outside the scheme, but we should be precise about how. It is not named as an exclusion in the guidance; it simply does not appear on the eligible provider list. That is a weaker basis than an express exclusion, and if you are in a borderline institution — an adult education service, a local authority provider, a specialist designated institution — the published provider spreadsheet is the thing to check rather than any general description.

The rounds so far

Note how far the window moved between the two rounds — from an October opening to a March opening, a five-month shift, with an announced autumn 2025 date abandoned in between. There is no backdating and no late claims process. If you were eligible in a year whose window has closed, that money is gone. The only sensible response is to subscribe to the GOV.UK email alerts on the guidance page, because the pattern so far gives no reason to trust that the window will land where you expect it.

Tax, National Insurance and pension

The tax treatment is unusually favourable and the pension treatment is unusually unfavourable, exactly as in the schools scheme.

On tax, the Department pays National Insurance and basic rate Income Tax on the payment on your behalf. For a basic rate taxpayer, the headline figure is the figure that arrives — a £6,000 award means £6,000 in your account. If you are, or the payment makes you, a higher rate taxpayer, you are responsible for the additional higher rate liability through PAYE. Given the salary levels in further education, most claimants will be comfortably inside basic rate. If you have an outstanding student loan, a deduction is taken automatically from the payment.

The payment is made as a single lump sum through the Department for Education's claim additional teaching payment service. Your employer is involved in the checking, though: the DfE's guidance says claims are verified by your employer and the DfE, and that eligibility is assessed at the point your employer reviews your claim. The service uses GOV.UK One Login with photo identification, so allow time for that if you have not used it before. For what is and is not known about payment timing, see when the retention payment is paid.

On pensions, the position is the same as the schools version and it is the most commonly missed detail in both: the payment is not part of your salary from your employer, and no pension contribution is made in respect of it by you, your employer or the government. Set against the rest of your remuneration, that is a real difference. Every pound of pensionable pay builds career average pension for the rest of your life under the scheme described on our FE lecturers and the TPS page. A retention incentive builds none.

What the interim evaluation found

Unusually for a scheme of this size, there is published independent evaluation. The Department for Education published Further Education Targeted Retention Incentive Evaluation: Interim report on 30 April 2026 — research report RR1619, produced by CFE Research with the National Foundation for Educational Research. It runs to 66 pages and covers year one, the 2024/25 academic year.

Its evidence base was substantial: 87 human resources and senior leadership staff surveyed, 2,943 claimant teachers surveyed, and eight provider case studies incorporating paired HR and leadership interviews and 23 claimant interviews.

• The problem is real and it is worse on recruitment than retention. 58% of HR and senior leadership respondents found it difficult or very difficult to recruit FE teaching staff, against 36% who found it difficult or very difficult to retain them.
• Claimants attribute a lot to the payment. Of those planning to stay in FE, 96% said the payment had at least some impact on that decision, and 21% said they would not have stayed teaching in FE without it.
• Satisfaction is high and intention to leave is low. 80% of claimants were satisfied working as an FE teacher, and only 4% intended to leave or were considering it. Among that small group, pay was the biggest driver at 77%, then workload at 68%, then college culture and management at 63%.
• Pay comparison remains the sore point. 50% agreed they were paid fairly once the incentive was included, but only 41% felt their salary compared favourably to similar roles elsewhere — a gap that says something about the limits of a one-off payment against a structural pay position.
• It works best on dual professionals. The payment was more likely to encourage ex-industry entrants, dual professionals and apprenticeship teachers to stay, which is consistent with the subject list's design.
• Recruitment impact is currently limited. The report is direct about this, which matters because recruitment is where the sector's respondents said the problem was worst.

Who actually claimed in year one

The Department published final data for the 2024/25 round on 17 December 2025, and it gives an unusually clear picture of where the money went. Use these figures rather than the provisional ones that circulated in May 2025, which were superseded.

By subject, building and construction dominated with 1,715 awards, followed by maths at 1,369 and engineering and manufacturing at 1,195. Computing accounted for 626, early years 518, chemistry 172 and physics 93, with a further 286 claiming across multiple eligible subjects. By hours band, 5,606 claimants were in the 12-hours-or-more band against just 368 in the lower band. By provider type, general FE colleges accounted for 5,411, 16-to-19 schools and academies 317, and sixth form colleges 246. The largest regional shares were the North West at 1,028, the South East at 869 and Yorkshire and the Humber at 812.

Two things stand out. The first is the rejection rate: roughly one application in five was turned down, which is high enough to suggest the eligibility tests are genuinely restrictive rather than a formality, and is a good reason to work through the gates carefully before applying. The second is the distribution across subjects. The two subjects shared with the schools scheme that recruit worst in schools — physics and chemistry — are the two smallest groups here by a wide margin, at 93 and 172. The FE scheme is, in practice, overwhelmingly a construction, maths and engineering scheme, which is a meaningfully different thing from what the shared name implies.

How much the scheme costs

The most authoritative funding figure we found is from the National Audit Office's April 2025 report Teacher workforce: secondary and further education, which records a Department for Education budget for the FE targeted retention incentive of £51.2 million in 2024-25. The NAO notes that it has not audited the Department's budget figures. FE Week reported in May 2025 that £34.1 million had actually been paid out in round one.

What is not confirmed

That is genuinely ambiguous rather than negative. A scheme between rounds looks exactly like a scheme that has quietly ended, and the window has already moved once without much warning. We are not going to predict which it is. What we can say is what would need to happen for a round three to exist: an update to the GOV.UK guidance page setting a window, a refreshed eligible provider spreadsheet with payment values, and confirmation of the career stage cut-off year. None of those had appeared at the time of writing.

There is one point of contrast worth noting, because it says something about the relative priority of the two schemes. The schools targeted retention incentive appears to be in the opposite position: its claim service states that applications can be made between September 2026 and January 2027, even though its main guidance page has not been refreshed to match. So as this page is published, the schools scheme is signposted as opening and the FE scheme is not signposted at all. That asymmetry may resolve in a fortnight; it may not.

• We have not found any confirmed 2026/27 FE payment amounts, provider list or career stage cut-off, and we are not going to extrapolate the 2025/26 figures forward as though they were confirmed.
• We have not found any announced change to the seven eligible subjects, in either direction, for any future round.
• We have not found any multi-year funding commitment for the scheme in a Budget or Spending Review, and the interim evaluation's statement that funding beyond round two is unconfirmed is the most recent authoritative word on it.

Sources and accuracy

The eligible subject list, payment bands, eligibility criteria, eligible provider types, tax and pension treatment and round dates are taken from the Department for Education's GOV.UK guidance Targeted retention incentive payments for FE teachers: academic year 2025 to 2026, first published 4 September 2024 and last updated 1 June 2026, together with its published change history and the claim additional teaching payment service. The exclusion of the non-statutory sector including independent training providers, the disadvantage measure methodology and the confirmation that the subject list was unchanged between rounds are from Further Education Targeted Retention Incentive Evaluation: Interim report (DfE research report RR1619, CFE Research with NFER, published 30 April 2026), which is also the source for every evaluation finding quoted. The round one outcome figures — applications, approvals, rejections, subject, hours, provider type and regional breakdowns, and the average net and gross award values — are from the DfE's final transparency data for the 2024 to 2025 academic year, published 17 December 2025, and supersede the provisional figures reported in May 2025. The £51.2 million budget figure is from the National Audit Office's Teacher workforce: secondary and further education (April 2025), Figure 11, with the NAO's own caveat that it has not audited the Department's budget figures. Workforce and median salary comparisons are from the DfE's Further education workforce statistics for 2024/25, published 14 May 2026. Schools scheme details used for contrast are from the parallel GOV.UK guidance for school teachers and are covered in full on our schools targeted retention incentive page.

Where the position for 2026/27 is not published, this page says so explicitly rather than extrapolating, and the section above sets out exactly what is and is not established. This is independent guidance for orientation, not financial, tax or employment advice, and it is not affiliated with the Department for Education or any trade union. Eligibility for a specific payment is determined by the DfE's claim service against your own circumstances, and that service — not this page — is the authoritative answer to whether you can claim.