Teacher Retention Payment vs ITT Bursary: The Difference

Search for "teacher bonus" or "teacher cash incentive" and you will get a completely undifferentiated soup of results: £29,000 bursaries, £6,000 retention payments, £31,000 scholarships, a withdrawn early-career payment scheme, student loan reimbursement, and a Welsh scheme worth £20,000 that works differently again. Almost none of these sources explains that these are separate programmes with separate rules, separate eligibility windows and separate subject lists — or that being eligible for one tells you essentially nothing about whether you are eligible for another.

This guide sets the two biggest schemes side by side properly. It is aimed at three groups of people: trainees and applicants trying to work out what they will actually receive and when; early-career teachers who took a bursary and are now wondering whether more money is owed to them; and career changers modelling whether the numbers stack up at all. Every figure here is for England unless flagged otherwise, and the devolved position gets its own section at the end.

Why these two schemes get confused

There are four good reasons the confusion is so persistent, and it is worth naming them because each one points to a different thing you need to check.

First, they cover overlapping subjects. Chemistry, computing, mathematics and physics attract both the top bursary rate and the retention incentive. If those are the subjects you are looking at, you will see both schemes mentioned constantly and often in the same breath, which makes them feel like one continuous package. They are not — and the moment you look at biology, geography or languages the overlap disappears entirely, because those subjects attract a bursary but no retention incentive at all.

Second, both were repeatedly renamed and restructured. The retention incentive was called the Levelling Up Premium until 2024 and was worth half as much before that. Bursaries have changed value every single year, sometimes dramatically. Content written two years ago is not wrong so much as describing a different world, and very little of it carries a visible date.

Third, both are talked about as "tax-free", but for different reasons and with different consequences. A bursary genuinely is not taxable income. The retention incentive is taxable, but the government pays the basic rate tax and National Insurance on it for you, which produces a similar-looking outcome by an entirely different route — and a materially different one if you are a higher rate taxpayer.

Fourth, providers and recruiters have every incentive to blur them. A training provider advertising "up to £35,000 of support available" may well be summing a bursary and a projected retention incentive that depends on a school you have not been appointed to yet. That is not dishonest, exactly, but it is a figure you should decompose before you treat it as income.

The core difference in one table

Before the detail, here is the whole comparison in a form you can hold in your head.

The single most useful line in that table is the one about what determines the amount. A bursary is a national subject-based incentive: every trainee in England on an eligible physics course gets the same £29,000 regardless of where they train or where they intend to teach. A retention incentive is a school-level disadvantage-based incentive: two physics teachers with identical training, identical degrees and identical timetables can receive £6,000 and £0 respectively, purely because of the schools that employed them.

ITT bursaries: how they actually work

A training bursary is a tax-free financial incentive intended to attract graduates into teaching in subjects where recruitment has been hardest. The amount depends on the subject you train to teach — not the subject of your degree. That distinction produces the single most useful piece of ITT funding advice there is, and the DfE's own funding manual illustrates it with an example: a trainee with a first class degree in biology who trains to teach physics is eligible for the £29,000 physics bursary, while the same trainee choosing to train to teach biology gets the £5,000 biology bursary. A £24,000 difference, decided by which course you apply for.

Here is the full England picture for postgraduate courses starting in the 2026 to 2027 academic year:

The mechanics matter as much as the amounts. A bursary is paid by your training provider in ten equal monthly instalments across the duration of the course — some providers engage the Student Loans Company to handle the payments on their behalf — so it functions rather like a modest salary paid over the academic year rather than a windfall at the start. If you withdraw from the course, you are paid for each month up to and including the month in which you formally withdraw, and the balance simply stops. It is not a loan and there is nothing to repay.

Eligibility has three components beyond the subject. You need a degree classification of a first, 2:1, 2:2, master's or PhD — a third class degree is not eligible, which is a hard line that catches a genuinely significant number of otherwise strong applicants. You must be eligible to receive UK student support, which covers UK nationals and settled or pre-settled EU nationals, with residents of the Isle of Man and the Channel Islands funded through their own authorities, and with a narrow transitional exception for languages and physics trainees who were offered an ITT place before 5pm on 7 May 2026. And your provider must confirm your eligibility in writing before you start — which they do automatically, because you do not apply for a bursary separately.

There is also an undergraduate strand that rarely gets mentioned. Final-year undergraduates on eligible secondary mathematics and physics ITT courses can receive a £9,000 undergraduate bursary, rising to £18,000 in total where the degree combines QTS with a master's, and there is a £40,000 veterans' undergraduate bursary paid as £20,000 in each of the final two years of an eligible course. If you are coming to teaching from the armed forces, that is a very substantial figure that is almost invisible in mainstream coverage.

Scholarships, and how they differ from bursaries

A scholarship is an alternative to a bursary, not an addition, and the funding manual is explicit that trainees cannot receive both. Where a scholarship exists for your subject it is worth £2,000 more in cash than the bursary, and it comes with a package of subject-specific extras — free membership of the relevant professional body, mentoring, subject-specific continuing professional development events, and access to a community of other scholars.

The crucial difference is that scholarships are competitive and externally assessed. They are awarded by subject bodies rather than by the DfE — the Royal Society of Chemistry for chemistry, BCS, the Chartered Institute for IT, for computing, the Institute of Physics for physics, and the British Council for languages. You apply to the scholarship body, you are assessed on subject knowledge and on your potential as a teacher of that subject, and you may not get it. A bursary, by contrast, is automatic on eligibility. The entry requirement is also usually stiffer: scholarship bodies typically look for a first, 2:1, master's or PhD, though several will consider a 2:2 where there is significant relevant experience behind it.

One planning point worth flagging: scholarship application windows are set by the subject bodies, not by the DfE, and they generally open and close earlier than people expect. If a scholarship is part of your financial plan, find the deadline the moment you decide on a subject rather than after you have accepted a place.

The 2026/27 bursary cuts: what actually changed

If you are comparing a figure you saw last year with the table above and finding a large discrepancy, this is why. The DfE announced substantial reductions to teacher training financial incentives for courses starting in 2026/27, with eight subject categories seeing bursary cuts and two scholarship categories reduced or withdrawn. No subject received an increase.

On the scholarship side, the mathematics scholarship — previously worth £31,000 and administered by a consortium of the Institute of Mathematics and its Applications, the London Mathematical Society, the Royal Statistical Society and Mathematics in Education and Industry — was withdrawn altogether for 2026/27, leaving maths trainees with the £29,000 bursary alone. The French, German and Spanish scholarships were reduced from £28,000 to £22,000. Chemistry, computing and physics scholarships were held at £31,000.

The DfE's stated rationale was that the incentive package tracks the recruitment pipeline, citing an additional 2,300 teachers in schools compared with the previous year. Whether you find that persuasive depends largely on whether you think a headline workforce number is the right measure for subject-level shortage, but the policy logic is at least coherent and openly stated.

The Targeted Retention Incentive, in brief

The other half of the comparison gets a full treatment in our Targeted Retention Incentive guide, but the essentials you need for the comparison are these.

• It is the scheme formerly called the Levelling Up Premium. Renamed, not abolished, and doubled in value from a £3,000 maximum to a £6,000 maximum before the rename happened.
• Four subjects only: chemistry, computing, mathematics and physics — and you must spend at least 50% of your contracted hours teaching one or more of them at the time you apply.
• Early career only. Eligibility is set by the academic year your ITT course started (postgraduate) or finished (undergraduate), producing a window of roughly five years from qualifying.
• Eligible schools only. State-funded secondary, middle-deemed secondary, and maintained or non-maintained special schools in England, ranked by pupil premium decile and split by Education Investment Area status. Primary is excluded. Independent schools are excluded. Agency supply is excluded.
• £6,000 at the top, £3,000 at the bottom. Pupil premium deciles 1-3 pay £6,000 inside an Education Investment Area and £4,000 outside; deciles 4-5 pay £5,000 and £3,000; deciles 6-7 pay £4,000 inside an EIA only; deciles 8-10 pay nothing.
• You have to claim it. There is an annual application window through the DfE claim service and no retrospective route once it closes.

The design intent behind the pair is reasonably clear once you see it: the bursary is there to get you into a shortage subject, and the retention incentive is there to keep you in a hard-to-staff school for the first few years, which is when teachers are most likely to leave. They address two different failure points in the same pipeline.

Tax, pension, and what each is really worth

Headline numbers are misleading in both directions here, and it takes about two minutes to get to the real ones.

A bursary is not taxable and attracts no National Insurance. The £29,000 you are quoted is the £29,000 you receive, spread over ten months. To take home £29,000 from employment you would need to earn something in the region of £41,000 gross, once Income Tax, National Insurance and pension contributions are accounted for. That makes a top-rate bursary year financially comparable to — arguably better than — a first year of actual teaching at £34,069 on M1 outside London, which is a genuinely striking thing to be able to say about a training year.

The retention incentive is taxable, but the tax is paid for you. The government meets the National Insurance and basic rate Income Tax on the payment, which is why it is usually described as being worth "up to £6,000 after tax". If you are a higher rate taxpayer, or the payment tips you into higher rate, you pay the additional higher rate liability yourself through PAYE. Student loan repayments are deducted automatically. And the payment plus the tax and NI paid on your behalf all count towards your income for benefit and threshold purposes.

Neither is pensionable, and for different reasons. During a bursary-funded training year you are not in employment and not a member of the Teachers' Pension Scheme, so the question does not arise — which is a real, if small, opportunity cost of an unsalaried training route compared with a salaried one, where you would normally be in the TPS from day one. The retention incentive is pensionable neither in practice nor in principle: the guidance states in terms that it is not part of your salary and that no pension contribution will be made in respect of it by you, your employer or the government.

Can you get both, and what a full run looks like

Yes. There is nothing in either scheme's rules preventing you from receiving a training bursary and, later, a targeted retention incentive. For a maths or physics teacher who trains on an unsalaried route and then takes a job in a highly disadvantaged school inside an Education Investment Area, this is simply the intended path through the system.

It is worth looking at what that actually amounts to over the first several years, because the total is large enough to change real decisions — while also being conditional enough that nobody should count on it.

Two constraints on that picture that recruitment marketing tends to skip. First, the retention incentive line is the one you have least control over: it depends on a school list you do not influence and that can leave you with nothing. Second, you cannot claim both a targeted retention incentive and an early-career payment in the same academic year — a rule that only ever affected the 2018/19 to 2020/21 ITT cohorts, since early-career payments are now closed, but which explains apparent gaps if you are reconstructing what you should have received in an earlier year.

What you cannot do is combine a bursary and a scholarship. They are alternatives. If you are awarded a scholarship, it replaces your bursary entitlement.

The routes that get neither

It is worth being blunt about who is left out, because a great deal of teacher finance content is written as though everybody is a physics PGCE applicant.

• Most subjects now get no bursary at all. English, history, music, art and design, religious education, drama, PE, business studies, psychology, sociology and more attract nothing for courses starting in 2026/27. If you are training in one of these, the salaried routes and the ordinary student finance package are your financial options, and that is not a marginal consideration.
• Primary teachers get neither scheme. There is no primary ITT bursary and the Targeted Retention Incentive is restricted to secondary and special schools. Primary trainees are funded through student finance, or salaried through a School Direct salaried place or the Teacher Degree Apprenticeship.
• Salaried trainees get no bursary. A bursary substitutes for a salary. If you are on a salaried School Direct place, a Teacher Degree Apprenticeship or Teach First, you are paid instead, usually on the unqualified teacher range. You do remain eligible for the retention incentive later, once qualified and in an eligible post.
• Third class degrees are not eligible for a bursary. The classification requirement is a first, 2:1, 2:2, master's or PhD. There is no equivalent restriction on the retention incentive, which is one of the few respects in which it is the more accessible of the two schemes.
• Agency supply teachers cannot claim the retention incentive, even in an eligible school teaching an eligible subject, because the scheme requires direct employment by the school and at least a term in post.

If you fall into several of those categories at once — training in a bursary-less subject, then teaching it in a school outside the eligible list — the honest answer is that these schemes will pay you nothing at any point, and your financial planning should be built entirely around salary, pay progression and responsibility allowances instead. Our TLR payments guide and Upper Pay Range threshold guide cover the levers that do apply to everyone.

What this means if you are choosing a subject or route

A few genuinely practical conclusions fall out of all of this.

The bursary decision is made when you choose your training subject, not your degree. The DfE's own worked example — a biology graduate training to teach physics gets the physics bursary — is the whole point. If your degree is in a science or a numerate discipline, whether you train to teach physics or biology is a £24,000 decision for your training year. That is not a reason to teach a subject you will be miserable teaching, and a physics teacher who hates physics will leave within three years and the scheme will have wasted its money on them. But it is a reason to find out whether you could credibly train in the higher-funded subject before ruling it out.

The retention decision is made when you choose your first school. Two otherwise similar job offers can differ by £6,000 a year for the next several years. That is a very large amount relative to an £34,069 starting salary, and it is invisible unless you check the eligible school list yourself, because there is no requirement on a school to mention it in an advert.

Do not let either payment make a bad decision look good. The NFER's analysis of retention payments found only weak evidence that they improve retention at all, with effects that were not statistically significant — one plausible reading being that money does not keep people in jobs that are not working for them. A £6,000 payment does not fix an unmanageable timetable, a school where you have no support, or a subject you do not want to teach. Both schemes are worth having and neither is worth enduring the wrong job for.

And build your budget on the permanent things. A bursary lasts one year. A retention incentive lasts as long as your cohort window and your school's band. Your pay point, your pay progression and any responsibility allowance you take on are the parts that compound, and they are the parts that follow you into your pension. You can model any of it with our take-home pay calculator.

Wales, Scotland and Northern Ireland

Everything above is England-only. Teacher training funding and retention incentives are devolved, and the schemes do not carry across borders in either direction.

Wales takes a structurally different and rather interesting approach. Rather than running a training bursary and a separate in-service retention payment, it runs a single ITE Priority Subject Incentive, rising to £20,000 for programmes starting from September 2026 — an increase of £5,000. The priority subjects are biology, chemistry, design and technology, digital technology and computer science, mathematics, international languages, physics and Welsh, which is a noticeably wider list than England's four retention subjects. What makes it distinctive is the payment structure: for a full-time student it is paid as £8,000 in January after completing the first term, £8,000 in July or August on achieving QTS, and a final £4,000 on completing induction in a maintained secondary setting in Wales. Part-time students receive four instalments across a longer period. In other words, Wales builds the retention incentive into the training incentive by holding a fifth of the money back until you have actually completed induction in a Welsh school — doing in one scheme what England does in two. Applications for the 2026/27 cohort ran from 1 September to 31 October 2026, and the entry requirement is a degree at 2:2 or above. Welsh Government guidance notes that the incentive is not normally taxable for full-time students but that the induction instalment may be taxable for someone who is by then employed.

Scotland and Northern Ireland operate their own arrangements again, with different funding bodies, different priority subjects and different structures, and neither the English bursary tables nor the Targeted Retention Incentive applies in either. We have not attempted to reproduce their current figures here rather than risk publishing stale ones — check directly with the relevant body before relying on anything you read about them, including on this site's own Scotland and Northern Ireland pay pages, which cover pay scales rather than training incentives.

Sources and accuracy

The 2026/27 bursary and scholarship figures on this page are taken from the Department for Education's published funding guidance for initial teacher training for the 2026 to 2027 academic year and the accompanying ITT bursary funding manual, which was published in December 2025. The payment mechanics — ten equal monthly instalments, provider administration, the non-taxable treatment, the withdrawal rules, degree classification requirements and the student support eligibility conditions including the 7 May 2026 transitional exception for languages and physics offers — come from that funding manual. The year-on-year comparison of bursary cuts is drawn from contemporaneous education press reporting of the DfE's October 2025 announcement, cross-checked against the published 2026/27 figures.

The Targeted Retention Incentive figures, payment bands and eligibility rules come from the DfE's GOV.UK guidance for school teachers and from its published Targeted retention incentive: methodology document of September 2024. Note that, as set out in our dedicated guide to that scheme, the DfE's guidance page had not been updated with confirmed 2026/27 amounts, cohort tables or a refreshed school list at the time of writing — so the retention incentive figures here are the confirmed 2025/26 position and should be checked against the claim service before you rely on them. The evidence on the effectiveness of retention payments is from the National Foundation for Educational Research's June 2025 analysis. The Welsh figures are from Welsh Government guidance for the ITE Priority Subject Incentive for 2026 to 2027.

This is independent guidance for orientation, not financial, tax or careers advice, and it is not affiliated with the Department for Education, the Welsh Government, any training provider or any teaching union. Bursary eligibility is confirmed by your ITT provider in writing and retention incentive eligibility is determined by the DfE claim service — those, not this page, are the authoritative answers for your own circumstances.