Pensioner members

7/5/2021 10:15:53 AM

3. Pensions increase

Local government pensions are revalued each April in line with changes in the Consumer Prices Index (CPI) as at the previous September. HM Treasury issue a Pensions Increase review order to notify us of the annual increase. The increase is applied to all pensions in payment for members aged 55 and over, as well as pensions paid to dependants of deceased members and those under age 55 who retired due to ill health.

If the annual CPI rate is negative, there is no increase or decrease applied to pensions in payment. LGPS funds have no discretion to vary the increase. To clarify, it does not in any way reflect the performance of the fund, or any pay freeze on public sector workers imposed by the government.


The increase applied in April 2021 was 0.5%.


We will confirm next year’s pension increase figure in our pensioner newsletter, ‘In-Touch’ which is issued every Spring.  

The pension increase figures for the last 10 years are provided in the following table.

Year PI%
2011 3.1
2012 5.2
2013 2.2
2014 2.7
2015 1.2
2016 0.0
2017 1.0
2018 3.0
2019 2.4
2020 1.7
2021 0.5

Tax and your pension increase

As the pensions increase may change the amount you are receiving in pension income, Her Majesty’s Revenue and Customs (HMRC) may issue you with a new tax code. HMRC assess each individual’s circumstances and allocate the appropriate tax code accordingly. This code is then sent to us electronically and automatically updates our payroll system. If your code has changed, HMRC will send you confirmation of your new tax code and how the code has been assessed. Should you have any queries regarding your tax code you need to contact HMRC.

For more information on tax codes, visit the HMRC website or call: 0300 200 3300.

Please quote your Pay as You Earn (PAYE) reference number - 120/JZ56432 – when you contact the Tax Office.

Your state pension

State Pensions are increased on 6 April each year. The basic State Pension increases each year by the highest of the following:

  • Earnings – the average percentage increase in UK wages, or
  • Prices – the percentage increase in the cost of living (CPI), or
  • 2.5%

You can find out more about the State Pension by visiting

If you have concerns about your finances we would suggest that you contact Money HelperCitizens Advice Bureau, or Age UK.


Guaranteed minimum pension (GMP)

If you were contracted out between 6 April 1978 and 6 April 1997, you will have a protection included in your deferred benefits known as a Guaranteed Minimum Pension (GMP). GMP rules are complicated, but generally this protection works to ensure your deferred benefits cannot be less at GMP age (60 for a woman, 65 for a man) than what you would have received had you contributed to the (now defunct) State Second Pension.

This amount does not appear separately on any pension statement, and it will only be included in your pension benefits i) when you start to receive them and ii) when you reach GMP age. You will receive an increase paid on any GMP protection built up after 5 April 1988 as part of your pension benefits. The increase on this element of your GMP will be equivalent to the pensions increase figure with a maximum of 3%. You will receive any increase due on your pre 5 April 1988 GMP protection in your state pension.  


Payslips and tax form P60

The gross pay figure appearing on your P60 is always less than the annual pay figure on your March payslip because the payslip figure is your current rate of pension and has not been paid for the whole of the tax year.

Your P60 will be available by 31 May each year.

Print entire guide

Last updated: 5 July 2021

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