National Insurance contributions (NICs) grant for 2025 to 2026
Source: gov.uk (2025-09-15)

Guidance for schools and local authorities on the National Insurance contributions (NICs) grant for financial year 2025 to 2026.

This guidance is for:
- local authorities
- school leaders
- governing bodies and their representatives
It relates to local authority maintained schools, academies (including free schools), and local authorities employing centrally employed staff (CES) in England.

The Department for Education (DfE) will provide over £930 million to support mainstream schools (in respect of their 5 to 16 provision) and high needs settings with the increase to employers’ National Insurance contributions (NICs) from April 2025. NICs funding for high needs settings will be provided through the core schools budget grant (CSBG) (https://www.gov.uk/government/publications/core-schools-budget-grant-csbg-2025-to-2026-for-special-schools-and-alternative-provision) in 2025 to 2026, rather than through the NICs grant.

We have published the funding rates for mainstream schools and academies, alongside information for local authorities employing CES in the methodology document.

We are also providing £25 million in respect of schools with early years provision and £155 million for post-16 schools and academies and further education colleges. Taken together, this is an increase of over £1 billion. Additional funding for early years will be distributed through the early years National Insurance contributions and teachers pay grant (EY NTP) grant. (https://www.gov.uk/government/publications/early-years-national-insurance-contributions-and-teachers-pay-grant-ey-ntpg-for-2025-to-2026) Funding for post-16 provision will be allocated through the post-16 NICs grant. (https://www.gov.uk/government/publications/post-16-national-insurance-contributions-nics-grant)

Methodology

This document sets out the methodology for the NICs grant. This includes guidance on how we will allocate funding for financial year 2025 to 2026: for mainstream schools (for the 5 to 16 year-old age range) and for local authorities with CES.

For the first time, we are providing additional grant funding for mainstream schools and academies with special units and resourced provision (SURPs). This funding will support the higher staffing costs that schools with SURPs typically face. Details of how we will allocate this funding can be found in the methodology document. (https://www.gov.uk/government/publications/national-insurance-contributions-nics-grant-for-2025-to-2026)

The funding for mainstream primary, secondary and all-through schools will be incorporated into core budget allocations for 2026 to 2027, by being rolled into the schools national funding formula (NFF) for 2026 to 2027. We will ensure that the usual appropriate arrangements are in place for academies, to ensure that they continue to receive support in the period April to August 2026, given their funding cycle follows the academic year.

Conditions of grant

We have published the NICs conditions of grant for April 2025 to March 2026 which sets out the terms and conditions that local authorities and academies must follow.

Allocations

We have published allocations in May 2025 and in August published the allocations for local authorities with CES.

Payments

Payment 1

Payment 1 (which will include the first allocation for mainstream schools with SURPs) will be paid to local authorities (high needs settings and CES) and their maintained schools in September 2025 and to academies in October 2025.

Payment 2

Payment 2 (to cover ‘new and growing’ schools, and the second allocation for mainstream schools with SURPs) will be paid to local authorities (high needs settings and CES) and their maintained schools in March 2026 and to academies in April 2026.