Pension Increase 2024 - Questions and Answers

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The Government has confirmed that local government pensions will rise by 6.7% from 8 April 2024. Local government pensions are increased each year in line with the cost of living to maintain their spending power.

Merseyside Pension Fund is bound by the provisions of annual Review Orders issued by HM Treasury and has no discretion in applying your pension increase.

Why isn’t the full pension increase paid in April?

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 8 April 2024. Therefore, up to 7 April 2024 your pension is payable at the old rate.

I worked out 6.7% increase on my pension, but I have not received as much as the amount I calculated. Why would that be?

It could be that you have not been in receipt of a pension for a full year and so will receive a proportionate amount, or that part of your pension includes a Guaranteed Minimum Pension. The pension increase is paid differently in these circumstances. Read more FAQs below for a further explanation.

What is a Guaranteed Minimum Pension (GMP)?

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.

A GMP is split into two parts, the first covering 6 April 1978 to 5 April 1988 and the second part covering 6 April 1988 to 5 April 1997. 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.

How do I know if I am entitled to a GMP?

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

How is the pension increase calculated on my pension?

We calculate pension increase on your annual pension at the end of March 2024 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).

How are payments of the pension increases on my GMP shared?

If your SPA is after 5 April 2016 we pay the full increase on both parts of the GMP 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 6.7%, 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 3.7% with your State Pension.

I am under age 55, why hasn’t my pension increased?

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 2024. 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.