The State Pension Debits and Credits (Revaluation) Order 2025
This Order officially updates the financial value of specific State Pension debits and credits by revaluing them based on changes in the general level of prices reviewed by the Secretary of State, applying specified percentage increases found in the accompanying schedule to tax years spanning from 2016-2017 up to 2025-2026, and sets staggered commencement dates for its provisions.
Arguments For
Ensures that financial adjustments related to State Pension debits and credits maintain their real value over time by linking them to the general level of prices, thus preserving fairness in pension calculations.
Implements a legally mandated review process under the Social Security Administration Act 1992, demonstrating governmental compliance with statutory responsibilities regarding pension liability assessment.
Provides specific, transparent percentage increases for tax years 2016-2017 through 2025-2026, allowing affected individuals and administrators to calculate updated figures accurately.
Arguments Against
The Order introduces complexities in pension administration by requiring retroactive application of inflation adjustments based on when an individual reached pensionable age, potentially leading to confusion.
Implementation timing is staggered, with different commencement dates for advance claims versus general purposes (December 2025 vs. April 2026), which could cause administrative timing errors or disputes.
The Order notes that no full impact assessment was produced because no significant impact on the private, voluntary, or public sectors was foreseen, which might overlook subtle administrative burdens or impacts on specific pension sharing arrangements.
The Secretary of State has reviewed the general level of prices in Great Britain in accordance with section 148AD(1) of the Social Security Administration Act 1992.
The Secretary of State has had regard to the earlier orders under that section, and it appears to the Secretary of State that relevant debits or credits have not, during the review period, maintained their value in relation to the general level of prices.
Accordingly the Secretary of State makes the following Order in exercise of the powers conferred by sections 148AD(2) and (3) and 189(1) and (4) of the Social Security Administration Act 1992.
The Secretary of State conducted a mandatory review of general price levels in Great Britain as required by the Social Security Administration Act 1992.
Evaluations showed that the existing values of relevant pension debits or credits have not kept pace with inflation during the review period.
Consequently, the Secretary of State issues this Order using the authority granted under sections 148AD(2), (3), and 189(1) and (4) of the same Act to adjust these values.
- Citation, commencement, extent and interpretation
(1) This Order may be cited as the State Pension Debits and Credits (Revaluation) Order 2025.
(2) This Order comes into force on—
(a) 22nd December 2025 for the purpose of making an award on a claim for a state pension under regulation 15(1) of the Social Security (Claims and Payments) Regulations 1987 (advance notice of retirement and claim for and award of pension) to a person who reaches pensionable age on or after 7th April 2026, and
(b) 6th April 2026 for all other purposes.
(3) This Order extends to England and Wales and Scotland.
(4) In this article “a state pension” means a state pension under Part 1 of the Pensions Act 2014.
This section establishes the title of the legislation as the State Pension Debits and Credits (Revaluation) Order 2025.
It specifies two different commencement dates: December 22, 2025, applies when processing advance claims for state pensions by those reaching pensionable age after April 7, 2026.
All other provisions become effective on April 6, 2026.
The rules apply across England, Wales, and Scotland, and define "a state pension" relative to Part 1 of the Pensions Act 2014.
- Increase in the amount of relevant debits or credits
For the purposes of paragraph 3 of each of Schedules 8 and 10 to the Pensions Act 2014 (pension sharing: appropriate weekly rate and reduction), the amount of relevant debits or credits for the tax year specified in the first column of the table in the Schedule to this Order are to be increased by the percentage of their amount specified in the corresponding entry in the second column.
This article institutes the revaluation mechanism for pension sharing calculations mandated in the Pensions Act 2014.
It directs that the amounts of 'relevant debits or credits' are increased by specific percentages.
These percentages are detailed in the table within the Schedule, corresponding to the relevant tax year mentioned in the first column.
Schedule Percentage increase of the amounts of relevant debits or credits for the specified tax years
Article 2
| Tax year | Percentage increase | | :--- | :--- | | 2016-2017 | 39.2 | | 2017-2018 | 37.8 | | 2018-2019 | 33.8 | | 2019-2020 | 30.7 | | 2020-2021 | 28.5 | | 2021-2022 | 27.9 | | 2022-2023 | 24.0 | | 2023-2024 | 12.6 | | 2024-2025 | 5.6 | | 2025-2026 | 3.8 |
The Schedule provides the core adjustment figures referenced in Article 2.
It lists various tax years, starting from 2016-2017 and concluding with 2025-2026, showing the exact percentage by which the amount of relevant debits or credits must be increased for each period.
For instance, figures from the 2016-2017 tax year are subject to a 39.2% increase.
Explanatory Note (This note is not part of the Order)
This Order is made following a review under section 148AD(1) of the Social Security Administration Act 1992 (c. 5) (revaluation of new state pension debits and credits).
Article 2 of this Order revalues debits and credits under section 49A(2) of the Welfare Reform and Pensions Act 1999 (c. 30) in accordance with the increase in the general level of prices.
Under paragraph 3 of each of Schedules 8 and 10 to the Pensions Act 2014 (c. 19) debits to which a person is subject (under section 14 of the Pensions Act 2014) and credits to which a person is entitled (under section 13 of the Pensions Act 2014) are revalued by the percentage specified by the last order under section 148AD to come into force before the person reached pensionable age. Pensionable age has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 (c. 26).
Article 1(2) ensures that the revaluation of relevant debits or credits will apply to persons reaching pensionable age on or after 7th April 2026, including those who make an advance claim for a state pension under regulation 15(1) of the Social Security (Claims and Payments) Regulations 1987 (S.I. 1987/1968).
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 fulfills the requirements of the Social Security Administration Act 1992 regarding revaluation.
It confirms the mechanism updates figures based on the Welfare Reform and Pensions Act 1999 and the Pensions Act 2014, stating that adjustments for pension debits (liabilities) and credits (entitlements) use the percentage from the last applicable revaluation order before an individual attained pensionable age.
Furthermore, it explains the practical effect of the staggered commencement date for those turning pension age on or after April 7, 2026, and notes that a formal impact assessment was deemed unnecessary due to anticipated minor impacts.
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