Your pension: more about GMP increases

In 'Your pension', the document we send you about your pension increase each year, we mention that if you were in the Fund between 6 April 1978 and 6 April 1997, your pension would normally include a 'GMP'. This article tells you about GMPs in more detail.

'GMP' stands for Guaranteed Minimum Pension. Because the Fund was 'contracted out' of the State Second Pension, a minimum level of pension set by the Government applied to any benefits you built up in the Fund during this time. This is your GMP.

Once you reach your 'GMP age' – which is 65 for men and 60 for women – the GMP part of your pension receives different increases. This is likely to mean that, if your pension includes any GMP in payment, its overall increase will be different to the rate shown on the front page of the 'Your pension' leaflet.

If you are the husband, wife or civil partner of a member and you're receiving a pension with GMP, this different increase will apply whatever your age.

The Fund applies increases to any GMP you built up from 6 April 1988, in line with inflation (as measured on the Consumer Prices Index), up to 3% a year. Please note: This is a different measure of inflation set by the Government and is not the one the Fund uses. We have called it ‘GMP inflation’. In 2019 GMP inflation is 2.4%.

Historically, from your State Pension Age (the earliest age you can start receiving your State pension), the State has also:

If you reached your State pension age before 6 April 2016...

The State will continue paying these extra increases as it does now, as part of your State pension.

If you:

The State will no longer pay these extra increases – so they will not apply to your GMP.

As at 6 November 2018 the State pension age for both men and women was equalised at age 65. The State pension age for both men and women is continuing to rise as follows:

The current rules also have State pension age rising from 67 to 68 between 2044 and 2046. However, this may change, as the Government is planning to review possible increases above 67 (taking into account longer life expectancy, for example) about every five years.

If you haven't reached State pension age yet, make sure you know when you'll get there. The Government is currently increasing State pension ages in a series of stages – which means that different people will have different State pension ages, depending on when they were born and their gender. The changes aim to bring women’s State pension age into line with men’s and take account of everyone living longer.

You can find out your State pension age using the calculator on the Government website, GOV.UK.

This is just one of a range of changes the UK Government have made to State benefits – for example, you may be aware that the State pension is a single amount for anyone now starting to receive it (instead of the two-part Basic State Pension and State Second Pension that were in place before).

However, there is no change to the Fund rules. The Fund will continue applying the same increase – GMP inflation up to 3% a year – on the GMP you built up from 6 April 1988 onwards.

Your Pension Increase Leaflet - April 2019