Defined Benefit Normal Pension Increase Rates In Payment
Published / Last Updated on 03/06/2020
Normal Pensions In Payment Increases:
Excess over GMP - Your pension increase rates when retired i.e. when being paid out to you as a pension for your ‘normal’ pension benefits excluding GMP (Guaranteed Minimum Pension from Contracting Out of SERPS).
Increase rates depend upon when you earned/built up/accrued those pension rights:
Pre 6 April 1997 Benefits: There is no legal requirement for pension schemes to increase pensions in payment benefits for benefits accrued/built up before April 1997
6 April 1997 – 5 April 2005 Benefits: Limited Price Indexation (LPI) increases i.e. inflation (now Consumer Prices Index) CPI subject to a maximum capped increase of 5% pa.
Post 5 April 2005 Benefits: Limited Price Indexation (LPI) increases are reduced i.e. inflation (Consumer Prices Index) CPI subject to a maximum capped increase of 2.5% pa.
NOTE: Your pension scheme may offer higher pensions in payment increases than the legal minimum rates above.
