The Public Service Pensions Revaluation Order 2025

Published: Tue 4th Mar 25

The order established revaluation percentages for public service pensions based on price and earnings changes for the 2024-2025 period, setting different effective dates for specified pension schemes.

The Public Service Pensions Revaluation Order 2025 sets the revaluation percentages for public service pensions for the period from April 1, 2024, to March 31, 2025.

It specifies a 1.7% increase based on price changes and a 4.5% increase based on earnings changes.

The order takes effect on April 1, 2025, but for certain specified schemes, it comes into effect on April 6, 2025.

The order covers England, Wales, Scotland, and Northern Ireland and is made under the powers granted by the Public Service Pensions Act 2013.

Arguments For

Improved pension adjustments: The order ensures that public service pensions are adjusted to reflect changes in the cost of living (prices) and earnings, maintaining the purchasing power of pensions.
Fairness and equity: The adjustments help ensure fairness for pensioners, protecting their retirement income from inflation and wage growth.
Legal and historical basis: The order is made under the powers conferred by section 9(2) and (3) of the Public Service Pensions Act 2013, reflecting established procedures for pension revaluation.
Transparency and predictability: The clearly defined percentage increases provide transparency and predictability for both pensioners and pension scheme administrators.

Arguments Against

Potential for inaccuracies: The use of CPI and average weekly earnings as indicators of price and earnings changes might not accurately reflect the specific financial circumstances or needs of all pensioners.
Limited impact assessment: The lack of a full impact assessment may leave some potential consequences of the adjustments unexamined.
Complexity of implementation: Coordinating the application of different commencement dates for various pension schemes might introduce administrative challenges.
Alternative approaches: Other methodologies for revaluing pensions could offer greater accuracy or better address individual circumstances.

Citation, commencement and extent (1) This Order may be cited as the Public Service Pensions Revaluation Order 2025. (2) Subject to paragraph (3), this Order comes into force on 1st April 2025. (3) Article 2 comes into force on 6th April 2025 in respect of schemes established by—(a) the Local Government Pension Scheme Regulations 2013; (b) the Local Government Pension Scheme (Scotland) Regulations 2018; (c) the National Health Service Pension Scheme Regulations 2015; (d) the National Health Service Pension Scheme (Scotland) Regulations 2015. (4) This Order extends to England and Wales, Scotland and Northern Ireland.

This section details the order's title, effective date(s), and geographical scope.

The order is titled "Public Service Pensions Revaluation Order 2025" and primarily takes effect on April 1, 2025.

However, for specific pension schemes listed (Local Government and NHS schemes in England and Scotland), the effective date is April 6, 2025.

The order applies to England, Wales, Scotland, and Northern Ireland.

Revaluation by reference to change in prices or earnings For the purposes of section 9(2) of the Public Service Pensions Act 2013 (revaluation), in relation to the period beginning with 1st April 2024 and ending with 31st March 2025—(a) the change in prices is an increase of 1.7 per cent; (b) the change in earnings is an increase of 4.5 per cent.

This section specifies the percentage increases used to revalue pensions.

For the period of April 1, 2024, to March 31, 2025, pensions will be increased by 1.7% to account for price changes (inflation) and by 4.5% to account for changes in earnings.

These figures are based on data regarding the Consumer Prices Index and average weekly earnings up to September 2024.

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