STPCD Recruitment & Retention Payments: Paragraph 27 Explained

What paragraph 27 actually says

Most teachers' mental model of their pay is a scale point, possibly a TLR, possibly an SEN allowance, and that is the end of the list. The School Teachers' Pay and Conditions Document contains a further mechanism that sits outside all of those, is not tied to a scale, is not tied to a responsibility, and has no prescribed value — and it exists specifically so that schools can pay you money for no reason other than wanting to hire you or wanting to stop you leaving.

Paragraph 27 of the STPCD 2025 is headed "Recruitment and retention incentives and benefits". Paragraph 27.1 provides that the relevant body — your governing body, academy trust board, or the local authority where it is the employer of an unattached teacher — "may make such payments or provide such other financial assistance, support or benefits to a teacher as it considers to be necessary as an incentive for the recruitment of new teachers and the retention in their service of existing teachers." It then adds a sentence which is remarkable for how specific it is: "A salary advance scheme for a rental deposit may be one of a number of tools that schools may wish to consider using to support recruitment or retention."

It is worth pausing on how unusually broad that drafting is. "Such payments or such other financial assistance, support or benefits" is close to the widest formulation available in English — it covers cash, it covers non-cash, it covers loans, it covers things that are not obviously any of those. The only test applied is whether the relevant body "considers" the award "to be necessary" as a recruitment or retention incentive. That is a subjective judgement handed to your governors, not an objective standard someone could second-guess. And unlike the TLR framework, which prescribes bands and ranges to the pound, or the pay ranges, which set hard minima and maxima, paragraph 27 attaches no numbers whatsoever for classroom teachers.

The reason so few teachers have heard of it is not that it is hidden. It is that the mechanism is written from the school's point of view rather than the teacher's. It reads as a permission granted to employers, which is exactly what it is, and there is no corresponding paragraph anywhere in the document telling teachers they may ask. Nobody is under any obligation to mention it to you at interview. The practical consequence is a provision that is genuinely available, genuinely unlimited in value, and almost entirely dormant in most schools — which is precisely why knowing it exists is worth something.

The menu: what schools can actually offer

Paragraph 27 itself is deliberately open-ended, but the accompanying statutory guidance — the second half of the same published document, which schools are expected to follow — fleshes it out at guidance paragraph 71. That paragraph confirms that schools "may make payments or provide financial assistance or benefits to aid recruitment or retention", repeats the rental deposit advance, and then gives a short worked list of what else is contemplated: "Other examples of assistance are transport season ticket loans for travel costs, a one-off payment such as a contribution to removal costs, or a time-limited allowance."

That is four distinct instruments, and they behave very differently from one another in terms of cash flow, tax and pension. Understanding which one you are being offered matters far more than the headline number.

The list in guidance paragraph 71 is introduced with the words "Other examples of assistance are", which is illustrative rather than exhaustive. Nothing in paragraph 27 or the guidance restricts the relevant body to these four. A school could, for instance, contribute towards professional subscription costs, fund a specific qualification, or provide some other benefit-in-kind, provided it can properly characterise the award as a recruitment or retention incentive rather than payment for work done. The four named examples are best understood as the Department's illustration of the sort of thing it had in mind, not as a closed list.

On value, guidance paragraph 72 is explicit: "Relevant bodies are free to determine the value of any award." For a classroom teacher, that is the whole of the constraint. There is no floor, no ceiling, and no formula. What actually limits the number is your school's budget, its published pay policy, and the governing body's appetite — all of which are local questions, not statutory ones.

The hard limit: this cannot be payment for doing a job

There is one genuinely hard prohibition in the framework, and it is the thing most likely to be got wrong in practice. Guidance paragraph 71 concludes: "Recruitment and retention incentives and benefits must not be made for carrying out specific responsibilities and should be in line with the relevant body's pay policy."

This is not a technicality. The entire architecture of teacher pay separates two different reasons for paying someone more than their scale point. If the extra money is because you are doing extra work — leading a department, coordinating a curriculum area, holding pastoral accountability for a year group — that belongs in the Teaching and Learning Responsibility framework, which requires a job description, sits in defined bands, and is unambiguously pensionable. If the extra money is because the school wants to attract you to a post that is hard to fill, or wants to stop you accepting an offer elsewhere, that is paragraph 27. The two must not be blurred.

The reason this protects teachers rather than constraining them is that a recruitment or retention incentive is reviewable and withdrawable by design, whereas a TLR is tied to a responsibility and cannot simply be removed while you are still doing the job. A school which paid a "retention incentive" for what is really a departmental leadership role would be giving you a weaker, more precarious version of something you should have had as a substantive, job-descriptioned TLR — and, depending on how it was structured, potentially a less pensionable one.

Why heads, deputies and assistant heads are treated differently

If you are in, or moving into, the leadership group, the menu above largely does not apply to you. Paragraph 27.3 is restrictive in a way the rest of the paragraph is not: "Headteachers, deputy headteachers and assistant headteachers may not be awarded payments under paragraphs 27.1 to 27.2 other than as reimbursement of reasonably incurred housing or relocation costs."

One category survives — housing and relocation costs, reimbursed, where reasonably incurred. Everything else on the classroom teacher's menu is closed off: no time-limited retention allowance, no season ticket loan, no general recruitment incentive.

The rationale is set out in the very next sentence of 27.3: "All other recruitment and retention considerations in relation to a headteacher, deputy headteacher or assistant headteacher — including non-monetary benefits — must be taken into account when determining the pay range." In other words, the framework does not think leaders should be denied recruitment and retention money. It thinks that money should be built into where the relevant body places the individual within the leadership pay range at the point of appointment, rather than paid as a separate, reviewable allowance sitting on top of it.

That has a real practical consequence for anyone negotiating a leadership post. Your one substantive negotiation is about pay range placement, and it happens at appointment. There is no second bite in the form of an incentive allowance later. If the school is struggling to recruit to the post, if you are relocating, if you are being prised away from another school — all of that is supposed to show up in the range determination, so it needs to be argued then, explicitly, rather than left as something to revisit once you are in post.

Guidance paragraph 72 adds a ceiling that classroom teachers do not face: any award to a member of the leadership group under paragraph 27, "including non-monetary benefits (for which a notional monetary value must be given)", is subject to the overall limit on salary and payments at paragraph 10.2, and "should be awarded only to reimburse for reasonably incurred housing or relocation costs." The requirement to put a notional monetary value on non-monetary benefits is worth noting: a school cannot route round the cap by providing something in kind instead of cash.

Paragraph 27.3 closes with a transitional provision that occasionally matters to long-serving leaders. Where a relevant body already pays a recruitment or retention incentive awarded to a head, deputy or assistant head under a previous version of the Document, it may — subject to review — continue paying it at its existing value until the relevant pay range is next determined under the current Document. So a legacy award is not automatically extinguished; it runs until the next range determination.

What the school must put in writing

If you are awarded something under paragraph 27, the guidance is specific about what the written notification has to contain. Guidance paragraph 73 states that where a teacher is given an incentive or benefit under paragraph 27, written notification given at the time of the award should state six things:

• Whether the award is for recruitment or retention. These are different things with different implications — a recruitment award is tied to your joining, a retention award to your staying — and the letter has to say which.
• The nature of the award — the guidance gives "cash sums, travel or housing costs etc." as the categories. This is the line that tells you which of the four instruments you are actually getting, and therefore how it will be taxed and whether it is pensionable.
• When and how it will be paid, as applicable. A lump sum on your first payslip behaves very differently from twelve monthly instalments, both for cash flow and for tax.
• Unless it is a one-off award, the start date and expected duration of the incentive. A time-limited allowance with no stated end date is not properly documented.
• The review date after which it may be withdrawn. This is the date you most need and are least likely to be told unprompted.
• The basis for any uplifts which will be applied, as applicable — that is, whether the award will rise with the annual pay award, with inflation, or not at all.

Separately, paragraph 3.4 of the Document requires that when the relevant body has determined a teacher's remuneration it must, within one month at the latest, notify the teacher in writing of that determination and specifically "of any payments or other financial benefits awarded under paragraph 27". So the paragraph 27 award is not something that can legitimately be handled by a verbal conversation and an unexplained line on a payslip; it is expressly carved out for written notification.

In practice, the sixth item — the basis for uplifts — is the one that quietly costs teachers the most money over time. A £2,000 time-limited allowance that does not rise with the annual pay award loses real value every year it runs. If it is expressed as a percentage of salary, or explicitly uplifted in line with the pay award, it holds its value. That is a question to ask before you accept, because it is much harder to renegotiate afterwards.

The review requirement — and the withdrawal risk

Paragraph 27.2 imposes a positive duty on the school. Where the relevant body is making one or more such payments, or providing such assistance or benefits in one or more cases, it "must conduct a regular formal review of all such awards." The obligation is mandatory — "must" — and it extends to all such awards, not just yours, which means a school running several of these has to look at them together rather than individually.

The same paragraph continues: "The relevant body or authority should make clear at the outset the expected duration of any such incentives and benefits, and the review date after which they may be withdrawn." Read alongside guidance paragraph 73, the design intent is clear: these awards are meant to be visibly temporary and visibly reviewable, and you are meant to know that from day one.

This is the genuine downside of the mechanism and it deserves to be stated plainly rather than buried. A recruitment or retention incentive is structurally less secure than a TLR, and far less secure than a scale point. A TLR cannot simply be removed while you continue to carry the responsibility it was awarded for. A pay scale point is protected. A paragraph 27 award, by contrast, comes with a review date written into it, and the document expressly contemplates it being withdrawn after that date. It is real money, but it is not money you should treat as permanent when deciding whether you can afford a mortgage.

Tax: the £8,000 relocation exemption

If the award you are offered is a contribution to removal or relocation costs, the tax treatment is governed by a specific statutory exemption that is considerably more generous than most teachers expect, and worth understanding before you agree a figure.

Qualifying relocation expenses payments and benefits are exempt from income tax up to a limit of £8,000 per relocation. The rules sit in Part 4 of the Income Tax (Earnings and Pensions) Act 2003, at section 271 onwards, and HMRC's own working guidance runs from EIM03100 in the Employment Income Manual. The £8,000 figure is a long-standing threshold that has not been uprated in many years, so it is worth checking the current position with your payroll team, but it remains the operative limit.

The exemption is not unconditional. Broadly, the relocation must arise because you are starting a new employment, changing role within the same employer, or changing your normal workplace; you must actually change your main residence as a result; the new residence must be within reasonable daily travelling distance of the new workplace; and your old residence must not have been. Qualifying costs include legal and professional fees on the sale and purchase, estate agents' charges, removal and transport costs, certain temporary accommodation costs, and travel between the old and new locations. Notably, they do not include things like a general disturbance allowance or compensation for a loss on selling your old home.

There is also a timing condition that catches people out: the relevant expenses must generally be incurred, and the move completed, by the end of the tax year following the one in which you started the new job. A teacher starting in September who then takes two years to sell a house can fall outside the exemption entirely.

Anything paid above the £8,000 limit does not lose the exemption on the first £8,000 — the excess is what becomes taxable, normally as employment income subject to income tax and National Insurance. So a £10,000 relocation contribution is not a £10,000 taxable benefit; it is £8,000 exempt and £2,000 taxable. That distinction matters when you are negotiating, because it means the marginal cost to you of pushing a relocation contribution above £8,000 is real but not catastrophic.

Tax: salary advances, season ticket loans and the £10,000 rule

Two of the four named instruments — the rental deposit salary advance and the transport season ticket loan — are loans rather than payments. That changes the tax analysis completely, and generally in your favour.

A loan from an employer on which you pay no interest, or interest below HMRC's official rate, is in principle a taxable benefit-in-kind: the "benefit" is the interest you did not have to pay. But there is a de minimis exemption which means that in practice most teachers will owe nothing. Where the total balance of all cheap or interest-free loans an employee has from that employment does not exceed £10,000 at any point in the tax year, there is no benefit to report and no tax to pay.

An annual season ticket, even an expensive one, sits comfortably inside that. A rental deposit advance — typically five weeks' rent under the Tenant Fees Act cap in England — will too, in almost all cases. So the ordinary position is that neither instrument creates a tax charge for you at all.

The trap is aggregation. The £10,000 test applies to the combined balance of all such loans from the same employment, not to each loan separately, and it is tested against the highest balance at any point in the year. A teacher who takes a rental deposit advance in September and a season ticket loan in January could, if both are large, cross the threshold — and if the combined balance exceeds £10,000 at any time in the year, the benefit is calculated on the whole outstanding balance, not merely on the excess above £10,000. That is a cliff edge rather than a taper, so if you are considering two loans at once it is worth asking payroll to check the combined position before you commit to the second.

The other thing to be clear about with both instruments is that they are not extra money in any lasting sense. They are cash flow. An advance solves the problem of needing £1,500 for a deposit in August when you will not be paid until the end of September; it does not increase your annual income by a penny, and it will be recovered from your salary. That is genuinely valuable — the deposit problem is a real barrier for teachers moving areas or starting their first post — but it should be understood as a timing solution, not as remuneration.

Is it pensionable? It depends entirely on the form

This is the question that matters most over a career, and the answer is not a simple yes or no. There is no line in the Teachers' Pension Scheme rules that says "recruitment and retention payments are pensionable" or "recruitment and retention payments are not pensionable". Pensionability follows the form the award takes, not the label paragraph 27 puts on it.

Teachers' Pensions publishes a list of payments that are non-pensionable regardless of which arrangement a member is in. That list covers travelling or expenses payments; any payment in lieu of notice to terminate a contract; any payment to cover the loss of contractual holiday pay; an honorarium payment; and any payment in respect of duties that are not part of a teacher's duty as a teacher. Recruitment and retention awards are not named on that list, which is the first and most important point: there is no blanket exclusion.

Working through the four instruments against that list gives a clear picture:

The practical significance of the first row is easy to underrate. Under the career average (CARE) scheme, every year's pensionable pay earns pension at that year's accrual rate and is banked permanently. A pensionable retention allowance of £2,000 held for four years does not merely give you £8,000 of gross extra pay; it also permanently increases the pension you accrued in each of those four years, and that increase is then revalued and paid for the whole of your retirement. A £2,000 removal costs contribution, by contrast, is worth exactly £2,000 — tax-free within the exemption, which is a real benefit, but with no pension tail whatsoever.

There is a secondary effect worth flagging for honesty's sake. An allowance which increases your pensionable pay also increases your annual salary rate, and Teachers' Pensions contribution rates are tiered by that rate. If an allowance pushes you over a tier boundary, your own contribution percentage rises — on all of your salary, not just on the allowance. That does not make the allowance a bad deal, since you are still substantially better off and the extra contributions buy extra pension, but it does mean the net increase on your payslip can be smaller than the headline figure suggests.

How to actually ask for one

Because paragraph 27 is permissive rather than mandatory, there is no process to invoke and no form to submit. You are asking your employer to exercise a discretion it has. That makes how you ask genuinely important.

Start with the pay policy, not the ask. Guidance paragraph 71 says these awards "should be in line with the relevant body's pay policy", and guidance paragraph 4 requires every relevant body to have one, to review it annually, and to ensure teachers "should always have ready access to copies". Requesting the pay policy is therefore an entirely ordinary thing to do and commits you to nothing. Read what it says about recruitment and retention. If it sets out criteria, you now know exactly what case to make. If it is silent, you know the question has to go to the governing body rather than being answerable by your head on the spot.

Pick the right moment. The mechanism is named "recruitment and retention" for a reason, and the two halves have different natural timings. A recruitment case is strongest between being offered a post and accepting it — that is the only window in which the school's interest in securing you is at its peak and nothing has been settled. A retention case is strongest when there is a genuine, specific reason you might otherwise leave: a concrete offer elsewhere, a relocation for family reasons that makes your commute untenable, a cost pressure that is pushing you out of the profession. Vague dissatisfaction is not a retention case; a identifiable risk of losing you is.

Ask for the instrument, not just the money. "Could the school consider a contribution to my removal costs under STPCD paragraph 27?" is a far more answerable question than "can I have more money". It tells the school which power you are asking it to exercise, signals that you know the framework, and — because the four named instruments carry very different costs to the school — lets you pick the one most likely to get a yes. A season ticket loan costs the school almost nothing beyond the cash flow, since it is repaid. A rental deposit advance likewise. Those are much easier asks than a permanent-feeling allowance.

Be specific about why you, and why now. The statutory test is whether the relevant body considers the award "necessary" as a recruitment or retention incentive. Help it reach that view. A shortage subject, a hard-to-fill post that has been advertised more than once, a specialism the school has struggled to replace, a genuine competing offer, a relocation you are making at the school's convenience — these are the facts that make the necessity test easy to satisfy.

Get the six things from guidance paragraph 73 in writing. If the answer is yes, do not let the arrangement live in an email thread. Ask for the written notification, and check it states recruitment or retention, the nature of the award, when and how it is paid, the start date and expected duration, the review date after which it may be withdrawn, and the basis for any uplifts.

Part-time teachers, academies and the edges of the mechanism

Nothing in paragraph 27 says that recruitment and retention awards must be pro-rated for part-time teachers, which is a genuine and under-appreciated difference from how TLRs and salary work. Pay ranges and TLRs are pro-rated because they are remuneration for time and responsibility. A recruitment or retention incentive is not obviously either: the school's interest in attracting or keeping a 0.6 FTE specialist in a shortage subject is not 60% of its interest in a full-timer, and a rental deposit does not shrink because you work three days a week.

That said, the framework does not prohibit pro-rating either, and many schools will do it by default simply because that is how every other element of pay behaves. Because the value of the award is entirely at the relevant body's discretion under guidance paragraph 72, this is a legitimate thing to raise: if the award is to cover an actual cost, such as a season ticket or a house move, the cost is the same whatever your contracted fraction, and there is a reasonable argument that it should not be scaled down. Whether that argument succeeds depends on your school, but it is worth making rather than assuming pro-rating is required.

Academies sit slightly differently again. An academy trust is not legally bound by the STPCD unless its funding agreement or individual employment contracts incorporate it, and many trusts have adopted their own pay policies which depart from the national framework in places. In practice, the great majority of trusts either follow the STPCD or mirror it closely, and a substantial number have explicit recruitment and retention provisions in their own policies — sometimes more generous and more clearly documented than a maintained school's, precisely because the trust has had to write the policy from scratch rather than relying on the national document. If you work in an academy, the trust's own pay policy is the operative document, and it is the one to request. Where the trust has adopted the STPCD, the paragraph numbers above apply directly.

A final honest caveat about how common any of this actually is. Paragraph 27 is a real, currently-in-force provision of the statutory pay document, and the four instruments described above are named in the Department's own guidance. But it is discretionary, budgets in most schools are tight, and a great many schools have never used it. Knowing about it will not conjure money out of a school that does not have any. What it does do is give you a named, statutory, legitimate thing to ask about at the exact moment when your bargaining position is strongest — and remove the very common assumption that a scale point and a TLR are the only two ways a school is allowed to pay you.