The Pensions Increase (Review) Order 2025

Citation, commencement and extent1.

(1)

This Order may be cited as the Pensions Increase (Review) Order 2025 and comes into force on 7th April 2025.

(2)

This Order extends to England and Wales, Scotland and Northern Ireland.

Interpretation2.

(1)

In this Order, “the Act” means the Social Security Pensions Act 1975.

(2)

In this Order, any reference to a pension is a reference to a pension which began before 7th April 2025.

Pension increase: annual rate and lump sums3.

(1) This article applies to an official pension if—

(a) a qualifying condition is satisfied; or

(b) the pension is—

(i) a derivative pension;

(ii) a substituted pension; or

(iii) a relevant injury pension.

(2) In relation to any period on or after 7th April 2025, the pension authority may increase the annual rate of the pension—

(a) for a pension which began before 8th April 2024, by 1.7 per cent;

(b) for a pension which began on or after 8th April 2024, by 1.7 per cent multiplied by—

where A is the number of complete months in the period between the beginning date of the pension and 7th April 2025.

(3) In relation to a lump sum which is payable on or after 8th April 2024 but before 7th April 2025, the pension authority may increase the lump sum by 1.7 per cent multiplied by—

where A is the number of complete months in the period between the beginning date of the lump sum (or, if later, 8th April 2024) and the date on which it becomes payable.

Reductions in respect of guaranteed minimum pensions4.

(1) Where—

(a) a person is entitled to an increase in a guaranteed minimum pension on 7th April 2025; and

(b) entitlement to that guaranteed minimum pension arises from an employment from which (either directly, or indirectly by virtue of the payment of a transfer credit) entitlement to the official pension also arises, the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury otherwise direct in accordance with the provision of section 59A of the Act.

(2) Where on the death of a deceased spouse or civil partner a person becomes entitled to a guaranteed minimum pension in relation to a surviving spouse’s pension or a surviving civil partner’s pension, the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced in accordance with section 59(5ZA) of the Act.