Pension Increase 2023 - Questions and Answers

The pension increase is payable from the first Monday following the beginning of the new tax year. This year the pension increase is payable from 10 April 2023. Therefore, up to 9 April 2023 your pension is payable at the old rate.

It could be that you have not been in receipt of a pension for a full year or that part of your pension includes a Guaranteed Minimum Pension (GMP). The pension increase is paid differently in these circumstances. Read more FAQs below for a further explanation.

If you are aged under 55 and retired on the grounds of ill health, or your deferred pension was brought into payment because you are permanently unable to undertake any regular full-time employment, you will receive an increase to your pension in April. However, if your deferred pension was brought into payment early because of ill health, but you are not permanently unable to undertake any regular full-time employment, your pension will not be increased until you reach age 55.

The LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS). If you paid in to the LGPS between 6 April 1978 and 5 April 1997, you may have a GMP. GMPs no longer accrued from 6 April 1997.

A GMP is based on the state entitlement you would have earned if you were in SERPS at the time. We check that the amount of pension we pay you is equal to or more than the amount of your GMP. In most cases your LGPS pension is higher than your GMP.

The GMP is paid as part of your local government pension, not in addition.

The Department for Work and Pensions (DWP) notifies you if you are entitled to a GMP and refer to the GMP as a Contracted Out Pension Equivalent (COPE) in any correspondence to you.

We calculate pension increase on your annual pension at the end of March 2023 less any GMP amount, if applicable. Please note that responsibility for payment of the pension increases on the GMP is shared between Merseyside Pension Fund and the DWP depending on the date you reach State Pension Age (SPA).

If your State Pension Age (SPA) is after 5 April 2016, we pay the full increase on the total GMP element with your local government pension.

If your SPA is before 6 April 2016, the DWP pay the full increase, no matter what the percentage is, on the GMP up to 5 April 1988 with your State Pension. For the GMP accrued between 6 April 1988 and 5 April 1997, we pay the first 3% increase and the DWP pay any increase above 3% with your State Pension.

This year, as inflation is 10.1%, you will receive 3% increase on the post-1988 element of the GMP paid with your local government pension, and the DWP pay the remaining 7.1% with your State Pension

Any pension which has been in payment for less than a year will be increased by a proportionate amount depending on the number of months it has been in payment.