How my pension increases in payment

Your pension increases from 1 May each year, roughly in line with inflation up to certain limits that are set out in the Scheme Rules. The actual increase that will apply may not be equal to the rise in inflation and it will depend on:

  • the period of time that you were a member of the Scheme and the limits in place over that period
  • the type of pension you had built up (and if an increase applies)
  • whether you had built up a Guaranteed Minimum Pension

We break your pension down into the various parts that apply to you and then add each part back together to work out the overall increase. We write out to you in April each year to explain the increase that will be applied. 

It’s a complicated calculation, but if you’d like to know more we’ve provided a breakdown of each part that might apply to your pension below.


Guaranteed Minimum Pension (GMP)

If you built up a pension before 6 April 1997, you’ve probably earned a Guaranteed Minimum Pension (GMP). It’s the minimum amount of pension the Trustee must pay you and it makes up a part of your total pension. When you reach the age your GMP becomes payable (age 60 for women, 65 for men), the amount of increase is calculated as follows:

  1. GMP earned between April 1988 and April 1997 increases in line with legislation (currently in line with the annual increase in the Consumer Prices Index (CPI) up to a maximum of 3% per year). This is provided by the Scheme.
  2. GMP earned before April 1988 does not receive an increase from the Scheme.

Until you reach this age, your whole pension increases in line with the rules for Scheme pension, as described below.

Scheme pension

This is the amount of your total pension that’s left over after your GMP (if applicable). It increases by the rise in the retail price index (RPI) at the December of the previous year up to the limits shown below.

Pensionable service

Maximum increase allowed

Before 6 April 1997


From 6 April 1997 before 1 August 2005


From 1 August 2005


Added Years AVCs

If you paid Added Years Additional Voluntary Contributions, the additional pension you’d built up will be treated as a Scheme Pension and increased in the same way.

Transferred-in pension

If you transferred benefits into the Scheme, any increases are discretionary and may not apply.

If you purchased a fixed pension from a transfer of benefits into the Scheme, this part of your pension will not receive any increases.