How your pension increases and GMPs
Each April, if you’re 55 or over and taking your LGPS pension, (or under 55 and have a dependants or ill-health pension), your pension will be increased each year in line with the cost of living. This is based on Consumer Price Index (CPI) as at September of the previous year.
If you're under 55 and you're receiving a pension for any other reason, it will normally be paid at a flat rate until 55. At 55 your pension will increase to the amount it would've been, had the increases been added to your pension from your date of leaving.
How is this increase applied?
We'll tell you in April if there's an increase, what the increase is, when it's applied and your new pension amount.
If you're under State Pension age, your LGPS pension is increased by us. Once you reach State Pension age, the Department for Work & Pensions (DWP) pays the increase on the guaranteed minimum pension (GMP) part of your LGPS pension with your state pension. However, we pay the first 3% increase on the GMP for membership after April 1988.
All increases to a GMP for membership before 1988 are paid by the DWP as part of your State Pension.
What is the guaranteed minimum pension (GMP)?
Until April 2016 the LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS) under the old State Pension. So, if you were a member of the LGPS between 6 April 1978 and 5 April 1997, the LGPS must pay you a GMP based on the state pension you would've had if you weren't in the LGPS.
Once you reach State Pension age, your pension will be compared with this GMP and increased to the rate of your GMP if it’s higher. The GMP is paid from State Retirement Age as part of your LGPS pension, not as an addition to it. In most cases, your LGPS pension is higher than your GMP. However, if your GMP is greater than your LGPS pension, we increase your LGPS pension to match it.
