Introduction
On 18th March 2025, The Department for Education announced an important update regarding Pupil Premium and National Insurance Contributions (NICs) funding for the upcoming 2025/26 school year. These funding changes are set to play an important role in supporting schools and helping disadvantaged students.
In this blog, we’ve explained the changes so that schools can easily see how they will be affected and what it means for the next academic year.
New Pupil Premium funding rates
Effective from April 1, 2025, schools will receive increased Pupil Premium funding. The new rates are as follows:
- Primary pupils eligible for Free School Meals (KS1 & KS2)**: £1,515 per year
- Secondary pupils eligible for Free School Meals (KS3 & KS4)**: £1,075 per year
- Service children**: £350 per year
- Adopted children**: £2,630 per year
- Looked-after children**: £876 per term
These increases reflect the government’s dedication to supporting vulnerable students and ensuring they have the resources needed.
National Insurance contributions grant
Alongside the Pupil Premium changes, the NICs Grant will provide more than £1 billion to schools and colleges to help manage the rising costs associated with employer National Insurance contributions starting in April 2025. The funding distribution is as follows:
- Mainstream (5-16) schools and academies**: £786 million
- High needs settings**: £125 million
- Local authority teachers**: £22 million
- Post-16 providers**: £155 million
- Early years providers**: £25 million
This funding is in addition to a previously announced increase of £2.3 billion in core school funding, bringing the total budget for schools to over £64.8 billion for the 2025/26 academic year.
Next steps for schools
Pupil Premium funding is set to surpass £3 billion in 2025/26, marking an increase of nearly 5% from the previous year. This funding will help disadvantaged pupils get the support they need to succeed in school and beyond.
To make the most of this increase, schools should update their Budget Planning spreadsheets to reflect the new figures. It’s also worth using the National Insurance Contributions (NICs) Grant calculator on the Department for Education’s website to estimate expected funding.
Get expert financial advice for your school
This funding boost is welcome news for schools feeling the strain of tight budgets and will continue to provide vital support for disadvantaged pupils, whose numbers are at an all-time high. Making the most of these resources will help ensure every child gets the support they need to succeed.
If you need further financial advice for your school, feel free to speak to our education finance experts - we’re here to help!
