The Guaranteed Minimum Pensions Increase Order 2026
This Statutory Instrument, The Guaranteed Minimum Pensions Increase Order 2026, legally mandates a 3 per cent annual increase for the portion of Guaranteed Minimum Pensions (GMPs) attributable to earnings factors covering the tax years from 1988-89 through 1996-97, effective from April 6, 2026, based on the Secretary of State's review of price increases showing a 3.8 per cent rise over the preceding 12 months.
Arguments For
Ensures that the value of those parts of Guaranteed Minimum Pensions (GMPs) accrued through contracted-out employment between 1988-89 and 1996-97 maintains pace with inflation expectations announced by the Secretary of State, thereby protecting pensioner income.
Fulfills a statutory requirement under the Pension Schemes Act 1993, providing the necessary legal mechanism for the annual adjustment as mandated by existing legislation.
The specified 3% increase reflects the Secretary of State's review indicating that the general level of prices increased by 3.8% over the relevant 12-month period, providing an official, prescribed uplift.
Arguments Against
The statutory requirement ensures this measure is largely automatic, but the chosen percentage (3%) might be argued as insufficient or excessive compared to the actual realized inflation rate (3.8% price increase noted in the preamble) for the period being measured, potentially affecting the real value of protected pension entitlements.
The Order only covers GMPs accrued during specific historical tax years (1988-89 to 1996-97) and does not address the methodology or adequacy of increases for GMPs earned outside this 'relevant period' or for modern state pensions.
By stating no significant impact assessment was needed, beneficiaries may lack detailed public scrutiny regarding the precise financial mechanism and its effect on liable pension schemes, although this is standard for minor instruments.
STATUTORY INSTRUMENTS
2026 No. 133
PENSIONS
The Guaranteed Minimum Pensions Increase Order 2026
Made - - - -
16th February 2026
Coming into force - -
6th April 2026
This text identifies the document as a Statutory Instrument numbered 2026 No. 133, concerning Pensions, specifically titled 'The Guaranteed Minimum Pensions Increase Order 2026'.
It records the date it was made as February 16, 2026, and the date it officially came into force as April 6, 2026.
The Secretary of State makes this Order in exercise of the power conferred by section 109(4) of the Pension Schemes Act 1993( 1 ).
The Secretary of State enacted this Order using the specific legal authority granted by subsection 109(4) of the Pension Schemes Act 1993.
In accordance with section 109(1) of that Act, the Secretary of State has reviewed the general level of prices in Great Britain for the period of 12 months commencing on 1st October 2024 and it appears to the Secretary of State that the general level of prices was greater by 3.8 per cent. at the end of that period than it was at the beginning of that period.
Following Section 109(1) of the Act, the Secretary of State reviewed the overall price levels in Great Britain for the year starting October 1, 2024.
This review found that prices increased by 3.8 per cent between the start and the end of that annual period.
In accordance with section 109(2) of that Act( 2 ), a draft of this Order has been laid before and approved by a resolution of each House of Parliament.
In compliance with Section 109(2) of the Act, a preliminary version of this Order was presented to and formally approved by a vote in both the House of Commons and the House of Lords.
Citation, commencement and extent
- -(1) This Order may be cited as the Guaranteed Minimum Pensions Increase Order 2026 and comes into force on 6th April 2026.
- (2) This Order extends to England and Wales and Scotland.
Article 1 establishes how the Order can be formally referenced: by its short title, 'The Guaranteed Minimum Pensions Increase Order 2026,' confirming its commencement date as April 6, 2026.
Furthermore, it specifies that the rules within this legislation apply across England, Wales, and Scotland.
Increase of guaranteed minimum pensions
- For the purposes of section 109(2) and (3) of the Pension Schemes Act 1993, the percentage by which there is to be an increase of the rate of that part of guaranteed minimum pensions which is attributable to earnings factors for the tax years in the relevant period( 3 ) is 3 per cent.
Article 2 dictates the core requirement: the percentage used for increasing the portion of GMPs linked to earnings factors during the defined 'relevant period' (specified in the Act) must be set at 3 per cent.
This figure applies for the purposes of Sections 109(2) and (3) of the 1993 Pension Schemes Act.
( 1 ) 1993 c. 48.
( 2 ) Section 109(2) was amended by section 55(a) of the Pensions Act 1995 (c. 26) and S.I. 2005/2050.
( 3 ) For the meaning of 'relevant period', see section 109(3A) of the Pension Schemes Act 1993 which was inserted by section 55(b) of the Pensions Act 1995 and amended by paragraph 40 of Schedule 13 to the Pensions Act 2014 (c. 19).
These footnotes provide legislative references.
Footnote (1) cites the primary legislation, the Pension Schemes Act 1993.
Footnote (2) notes that Section 109(2) has been previously modified by the Pensions Act 1995 and another Statutory Instrument in 2005.
Footnote (3) directs the reader to Section 109(3A) of the same Act, as amended, to understand what specific tax years constitute the 'relevant period' for this GMP calculation.
Status:
This is the original version (as it was originally made). This item of legislation is currently only available in its original format.
This status note confirms that the text provided is the exact version of the Order as it was first created and published, and it has not been updated or consolidated into a revised format.
Signed by authority of the Secretary of State for Work and Pensions
16th February 2026
Torsten Bell Parliamentary Under Secretary of State Department for Work and Pensions
This section formally records the authorization for the Order, signed by Torsten Bell, the Parliamentary Under Secretary of State for the Department for Work and Pensions, on February 16, 2026.
EXPLANATORY NOTE
(This note is not part of the Order)
This Order makes provision for the annual increase of the part of guaranteed minimum pensions attributable to earnings factors for the tax years 1988-89 to 1996-97. Guaranteed minimum pensions are payable by defined benefit occupational pension schemes that were contracted out of the Additional State Pension between 6 April 1978 and 5 April 1997. This Order specifies the percentage for the annual increase as 3 per cent.
A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.
The Explanatory Note clarifies that the Order legally establishes the annual adjustment for GMPs based on earnings factors dating from the 1988-89 to 1996-97 tax years.
GMPs themselves originated from occupational pension schemes that were 'contracted out' of the State Pension system between 1978 and 1997, and the mandated increase rate here is 3 per cent.
The note also states that because the expected impact on public, private, or voluntary sectors is minimal, a full regulatory impact assessment was not required.