How is my pension increased?

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Each April, your local government pension is increased according to the government’s method for increasing public sector pensions - in line with the previous September’s inflation figure, as measured by the Consumer Prices Index (CPI).

If you are under age 55, your pension will be increased if you retired early on grounds of ill health, or your deferred pension was brought into payment early because of ill health, and you are permanently incapacitated from engaging in any regular full-time employment.

If you are under 55 and your pension is in payment for any other reason, it will normally be paid at a flat rate until age 55. At 55 it will increase to the level it would have been, had it been increased every year since your date of leaving.

The following table shows the pension increases applied to local government pensions since 2000:
 
April 2017 1%
April 2016 0%*
April 2015 1.2%
April 2014 2.7%
April 2013 2.2%
April 2012 5.2%
April 2011 3.1%
April 2010 0%*
April 2009 5.0%
April 2008 3.9%
April 2007 3.6%
April 2006 2.7%
April 2005 3.1%
April 2004 2.8%
April 2003 1.7%
April 2002 1.7%
April 2001 3.3%
April 2000 1.1%
*The rate of inflation recorded for the previous September was a negative percentage. Despite this, the local government pension was not reduced in April and remained in payment at the same rate.
 

If you have started to receive your pension within the last 12 months, your first increase will be a proportion of the full increase.

If you reached State Pension Age (SPA) before 6 April 2016, payment of the increases to your pension may be shared between Merseyside Pension Fund and the government (DWP).

Your pension may comprise of two elements Guaranteed Minimum Pension (GMP) and pension in excess of GMP.

A GMP applies if you were a scheme member between 6 April 1978 and 5 April 1997 and have reached SPA:

  • If you reached SPA before 6 April 2016, the DWP pays the increases on the GMP part of your LGPS pension with your state pension; however, Merseyside Pension Fund has to pay the first 3% increase on the GMP generated by any membership after April 1988.
  • If you reach SPA after 5 April 2016 but before 6 December 2018, Merseyside Pension Fund pays the whole increase on the GMP as part of your LGPS pension.
  • If you are due to reach SPA after 5 December 2018, the way in which the GMP will be treated is currently under review. The government is consulting about how increases to your GMP should be paid once you reach SPA.