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Nilgosc


Annual Pensions Increase

The Pensions (Increase) Act 1971 provides for cost of living increases which apply to public service pensions. Each year in April, in line with the Pensions Increase (Review) Order, NILGOSC increases your pension to reflect rises in the cost of living.

How much is my Pensions Increase?

The table below details recent Pensions Increase rates.

 Year

Pension Increase

2017
1%
2016
0%
2015
1.2%
2014
2.7%
2013
2.2%
2012
5.2%
2011
3.1%
2010 0%
2009 5% 
2008 3.9%

If you only went on to pension during the previous tax year then you are entitled to a proportionate percentage increase depending on the number of months it has been in payment.

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Has the calculation of Pensions Increase changed?

Before April 2011, Pensions Increase was based on the increase in the Retail Prices Index (RPI) during the twelve months to the September of the previous year. However the Budget Statement of 22 June 2010 announced that from April 2011, the Consumer Price Index (CPI) replaced RPI as the measure of inflation used to apply cost of living increases. The CPI has been used from April 2011.

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Who should I contact if I have any further questions?

Should you wish to discuss any item relating to your pension increase please contact the Payroll Team on our Direct Line 0345 3197 326 or email us at info@nilgosc.org.uk. Please remember that our busiest times are on Monday mornings when we deal with very high volumes of calls. You may find it easier to speak to us later on in the week when the number of incoming calls decreases.

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What is a Guaranteed Minimum Pension (GMP)?

The LGPS (NI) (the Scheme) is contracted out of the State Second Pension Scheme, previously known as the State Earnings Related Pension Scheme (SERPS). As a condition of contracting out for service before 1997, the Scheme had to guarantee that the pension benefits payable would be no less than a GMP. If you, or your deceased spouse, participated in the Scheme between 6 April 1978 and 5 April 1997 you will have earned a GMP. This GMP is not a separate benefit paid in addition to your Scheme pension but the pension we pay you must equal or exceed your GMP. HM Revenue and Customs work out the level of your GMP. Your GMP comes into force normally when you ask for your State Pension to be paid to you. (There are circumstances when the GMP comes into force at a later date but the effect on your Scheme pension is the same).

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What effect does the GMP have on the Pensions Increase which NILGOSC pays me?

At present when your GMP comes into force, the National Insurance Contributions Office (NICO) tells NILGOSC the amount of your GMP. NILGOSC then adjusts its records to reflect the fact that the Government now pays some of the annual pensions increase on the GMP element of your Scheme pension along with your State Pension. Depending on whether you have pre-April 1988 GMP, post-April1988 GMP or a mixture of both types of GMPs, the increases must be paid by either NILGOSC or the Government or a split between both NILGOSC and the Government. However, the overall increase in your total pension i.e. Scheme pension plus State Pension should be the annual pensions increase amount.

On 1 March 2016 the Government announced a change to how pension increases are to be applied to the Guaranteed Minimum Pension (GMP) from 6 April 2016. For any member who reaches State Pension Age (SPA) before 6 April 2016 there is no change to the way pension increases are calculated. For any member reaching SPA between 6 April 2016 and 5 December 2018 NILGOSC will pay the full normal pensions increase on their pensions even if they have a GMP component. For any members reaching SPA from 6 December 2018 the Government intends to carry out a consultation later this year.

Every year NILGOSC will calculate the increase relating to your pension, however we may have to do so before NICO has notified us of your GMP details. If this happens we may have to increase or reduce later pension payments to adjust for any overpayment or underpayment. We shall of course notify you in advance before doing so.

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Will my State Pension be increased?

Basic State Pension does not fall under the Pensions Increase rules. The Government's 'triple lock' commitment increases State Pensions by the greater of either prices, earnings or 2.5%.
State Pensions are not paid by NILGOSC. They are paid by the Social Security Agency who can be contacted at 0845 601 8821 if you have any queries, or you may visit www.nidirect.gov.uk for more information.

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