Pensions Increase

All public service pensions (of which the Local Government Pension Fund is one) are increased each year to reflect the rises in the cost of living. This is sometimes called inflation proofing or index linking.

The LGPS offers full index linking to pension benefits i.e. there is no upper limit or capping on the amount by which benefits will be increased in times of high inflation.

Pensions Increase is normally paid to:

  • Pensioners who are aged 55 or over; or 
  • Pensioners who have retired for the reason of permanent ill health at any age; or 
  • Spouses and dependants of former pensioners

Pensions Increase 2023

Your Berkshire pension is increased annually in line with the Pensions Increase Order which is currently linked to the Consumer Prices Index (CPI). The increase is calculated in line with the CPI index based on the 12 months to September 2022.

As the September 2022 CPI rate was 10.1%, your annual pension will increase by 10.1% from Monday 10 April 2023:

You will receive a pensions increase booklet in April 2023 confirming the value of your annual pension from 10 April 2023.

If your pension began before 26 April 2022, you will receive the full 10.1% increase. If your pension began on or after 26 April 2022, you will receive a proportionate increase in line with the table below:

 

  Pensions commencing
  before 26 April 2022

   10.1% 
  26 April 2022   25 May 2022  9.26%
  26 May 2022   25 June 2022  8.42%
  26 June 2022   25 July 2022  7.58%
  26 July 2022    25 August 2022  6.73%
  26 August 2022   25 September 2022  5.89%
  26 September 2022   25 October 2022  5.05%
  26 October 2022   25 November 2022  4.21%
  26 November 2022   25 December 2022  3.37%
  26 December 2022   25 January 2023  2.53%
  26 January 2023   25 February 2023  1.68%
  26 February 2023   25 March 2023  0.84%


If your Berkshire Pension commenced after 25 March 2023 you will not be due an increase to your pension this year, however your pension will increase in line with CPI from Monday, 8 April 2024.

The rates of pensions increase for the last 10 years are:
 

 10 April 2023

10.1%

 11 April 2022

3.1%

 12 April 2021

0.5%
 6 April 2020

1.7%

 8 April 2019

2.4%

 9 April 2018

3%

 10 April 2017

1%

 11 April 2016

0%

 6 April 2015

1.2%

 7 April 2014

2.7%

 

Pensions increase and GMP

This is where things get a little complicated. Prior to 6 April 2016 the LGPS was contracted-out of the State Second Pension (formerly known as SERPS - the State Earnings Related Pension Scheme). When you reach state pension age you will receive a notice from HM Revenue & Customs giving details of your Guaranteed Minimum Pension (GMP) (this is the amount that is guaranteed to be paid to you by the LGPS had you not been contracted-out of the State Second Pension).

Your GMP is already included in the total pension you receive from the Berkshire Pension Fund. From state pension age, therefore, your pensions increase will be paid from 2 sources, HM Revenue & Customs and the Berkshire Pension Fund.

Cost of living increases on the GMP element of your LGPS pension, accrued between 6 April 1978 and 5 April 1988, are paid by the Pensions Service with your State Pension. The Royal County of Berkshire Pension Fund pays up to the first 3% of any increase due on the GMP element of your LGPS pension accrued between 6 April 1988 and your date of retirement, the balance due, if any, is paid by the Pension Service with your State Pension.