As a result of the Pensions (Increase) Act 1971, pensions paid by the Teachers’ Pension Scheme are indexed in line with the cost of living.

If you were contracted out at any point between 6 April 1978 and 5 April 1997, you may have an element of your pension from the Teachers’ Pension Scheme which is known as the Guaranteed Minimum Pension (GMP).  Certain elements of the GMP are not increased when a person reaches State Pension Age as the Government has paid increases on the pre 1988 GMP and the post 1988 GMP above 3% (if applicable) as part of the State Additional Pension.

Please note that if you have already attained State Pension Age before 6 April 2016, there will be no change to the existing system of providing pensions increase.  Increases to the pre 1988 GMP and any increase above 3% in respect of the post 1988 GMP will continue to be provided by the Government, in the same way it was applied through the previous Additional State Pension.  Any future increase involving a GMP may be payable through the Scheme and the State.

If you reach State Pension Age between 6 April 2016 and 5 December 2018, the Government announced that public service schemes such as the Teachers’ Pension Scheme will provide full indexation on the full amount of the member’s pension payable for life.  This includes periods which were formally indexed by the State e.g. pre 1988 GMPs.  Hence, for this group of members, all indexation (where applicable) will be provided by the Teachers’ Pension Scheme. 

If you reach State Pension Age after 6 December 2018, as there will no longer be any Additional State Pension to provide increases on the pre 1988 GMP or on the post 1988 GMP above 3% per annum, we can only confirm, at the moment, that the Teachers’ Pension Scheme will continue to be responsible for providing increases on the post 1988 GMP up to a maximum of 3%.

The Government announced its plan to consult on how best to address the joint issues of indexation and ensuring equal payment for public service pension scheme members who reach State Pension age on or after 6 December 2018. The Government expects to launch this consultation in summer 2016 and will take into consideration the generosity of the new State Pension whilst seeking to balance cost, simplicity and fairness in any outcome.