Under rules set by the government, your benefits are increased each year in line with the increase in the consumer prices index (CPI). Before 2011, this was in line with the retail prices index (RPI). The rate does not reflect the performance of the Staffordshire Pension Fund. The increase applies to you whether you are a deferred member, a pensioner member, or one of their dependants.
If you are in receipt of a pension it will be increased each April if you:
- are aged 55 or over
- retired on ill health grounds
- are receiving a widow's, widower's, partner's or child's pension
If you don't fall into one of these groups, your pension will still attract the increase but it will not be paid until your 55th birthday. In this case, please note that arrears of Pensions Increase prior to age 55 are not payable to you.
If you have a deferred pension, pensions increase will be applied to your pension during its period of deferral. This will be shown on your annual benefit statement issued by Pension Services.
After your deferred benefit is bought into payment, it will attract increases as shown above.
Pension increase rates
Change in annual revaluation or inflation proofing method
In his emergency budget statement on 22 June 2010 the Chancellor, George Osborne announced that in future annual increases for public sector pension schemes will be linked to the annual rise in the Consumer Price Index (CPI), rather than the retail price index (RPI), which was used to calculate annual 'pensions increase orders' previously.
The change affected 'deferred' benefits (pension and lump sum) as well as pensions currently in payment. The CPI index is based on a wider 'basket' of goods and services but excludes changes in housing costs. This change applied from April 2011.
Frequently asked questions
We will increase your Annual Pension each April so that it keeps pace with the cost of living. The amount of Pensions Increase is based upon what the government says consumer prices have increased by in the 12 month period up to the end of the previous September.
All Annual Pensions receive Pensions Increase, except those awarded due to redundancy, efficiency, flexible retirement or approved for payment by an employer where the person in receipt of the pension is aged between 50 and under 55. If your pension was awarded due to any of these reasons the accumulated effect of the increases awarded since you retired will be added to the pension when you reach age 55. After age 55, your pension will be increased each year.
In some special circumstances (i.e. where there is a dependant who is wholly or mainly supported by you and who is either under 17 or is in full time education or training), your pension can be increased before the age of 55. However, in the case of a woman, only the fraction of her pension earned in respect of Membership before 1 January 1993 will be increased and in the case of a man only that fraction of his pension earned in respect of Membership between 17 May 1990 and 31 December 1992 will be increased.
If you retire before State Retirement Age and your pension is in payment you will receive the increase in full. However, your first increase will be apportioned according to the number of months your pension has been in payment since the previous increase. When you reach State Pension Age or you are retiring at or after State Pension Age and you have pensionable service before 6 April 1997 your increase may be calculated in two parts and paid from two sources.
The Pensions Service pays an increase related to your Guaranteed Minimum Pension with your state pension. This means that the Local Government Pension Scheme will pay an increase on the balance of your Pension (i.e. your Pension less your Guaranteed Minimum Pension).
The Local Government Pension Scheme is responsible for paying up to 3% of the increase to that part of your Guaranteed Minimum Pension that relates to any of your service after 5 April 1988.
This is rather complicated but it should be noted that the total increase you will get from both sources will be the same as if the Local Government Pension Scheme had paid all of it.
You should notify your local office of the Pensions Service (of the Department for Work and Pensions) immediately of any increase to your Local Government Pension. If you don't do this you may have an overpayment of any state benefits you receive from them.