The Pensions Increase (Review) Order 2019

S.I. 2019/546 · Made 12 March 2019

Pensions

Made 12th March 2019

Laid before Parliament 14th March 2019

Coming into force 8th April 2019

The Secretary of State for Work and Pensions has, by virtue of section 151 of the Social Security Administration Act 1992^f1, given a direction^f2 that the sums mentioned in section 150(1)(c) of the Act are to be increased by a specified percentage.

The Treasury make the following Order in exercise of the powers conferred by section 59(1), (2), (5) and (5ZA) of the Social Security Pensions Act 1975^f3 and now vested in them^f4.

Annotations to the whole text

Footnotes

f1: 1992 c.5; section 151(1) was amended by Section 130(2) of the Pensions Act 1995 (c.26).
f2: This direction is contained in S.I. 2019/480
f3: 1975 c.60. Section 59(1) was amended by section 1(7) of the Pensions (Miscellaneous Provisions) Act 1990 (c.7) and by the Social Security (Consequential Provisions) Act 1992 (c.6), Schedule 2, paragraph 34. Section 59(5) was amended by section 11 of the Social Security Act 1979 (c.18) and the Social Security Act 1985 (c.53), Schedule 5, paragraph 33. Section 59 was also amended by the Social Security Act 1979, section 11 and Schedule 3, paragraph 20; section 5 of the Pensions (Miscellaneous Provisions) Act 1990 (which inserted subsection (5ZA)) and the Pensions Schemes Act 1993 (c.48), section 190 and Schedule 8, paragraph 9(1). Section 59 was modified by section 59A, which was inserted by section 11(4) of the Social Security Act 1979, amended by the Social Security Act 1986, section 9(9), and further amended by the Pensions Schemes Act 1993, section 190 and Schedule 8, paragraph 9(2). Section 59(5ZA) was amended, and subsections (5ZB) and (5ZC) inserted, by the Pensions Act 2008 (c.30), section 137 and Schedule 11, Part 6. Subsections (5ZB), (5ZC) and (7) were in addition amended by S.I. 2014/560, Schedule 3, paragraph 2.
f4: By virtue of article 2(1)(c) and (d) of S.I. 1981/1670.

1Citation and Commencement
2Interpretation
3Pensions increase: annual rate and lump sums
4Reductions in respect of guaranteed minimum pensions
Signature
Explanatory note

1Citation and Commencement

This Order may be cited as the Pensions Increase (Review) Order 2019 and comes into force on 8th April 2019.

2Interpretation

(1)

In this Order, “the Act” means the Social Security Pensions Act 1975.

(2)

In this Order, any reference to a pension is a reference to a pension which began before 8th April 2019^f1.

3Pensions increase: annual rate and lump sums

(1)

This article applies to an official pension if—

(a)

a qualifying condition is satisfied; or

(b)

the pension is—

(i)

a derivative pension;

(ii)

a substituted pension; or

(iii)

a relevant injury pension.

(2)

In relation to any period on or after 8th April 2019, the pension authority may increase the annual rate^f1 of the pension—

(a)

for a pension which began before 9thApril 2018, by 2.4 per cent;

(b)

for a pension which began on or after 9th April 2018, by 2.4 per cent multiplied by—

\frac{A}{12}

where A is the number of complete months in the period between the beginning date of the pension and 8th April 2019.

(3)

In relation to a lump sum which is payable on or after 9th April 2018 but before 8th April 2019, the pension authority may increase the lump sum by 2.4 per cent multiplied by—

\frac{A}{12}

where A is the number of complete months in the period between the beginning date for the lump sum (or, if later, 9th April 2018) and the date on which it became payable.

4Reductions in respect of guaranteed minimum pensions

(1)

Where—

(a)

a person is entitled to an increase in a guaranteed minimum pension on 8th April 2019; and

(b)

entitlement to that guaranteed minimum pension arises from an employment from which (either directly, or indirectly by virtue of the payment of a transfer credit) entitlement to the official pension also arises;

the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury otherwise direct in accordance with the provisions of section 59A of the Act^f1.

(2)

Where on the death of a deceased spouse or civil partner a person becomes entitled to a guaranteed minimum pension in relation to a surviving spouse’s pension or a surviving civil partner’s pension, the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced in accordance with section 59(5ZA) of the Act.

Signature

Mike Freer

Paul Maynard

Two of the Lords Commissioners of Her Majesty’s Treasury

12th March 2019

Explanatory note

(This note is not part of the Order)

Under section 59 of the Social Security Pensions Act 1975 (c.60) where the Secretary of State for Work and Pensions, under the Social Security Administration Act 1992 Act (c.), directs the sums in s.150(1)(c) are to be increased by a specified percentage, the Treasury shall provide by Order for the increase in the rates of public service pensions. The Pensions (Increase) Act 1971 (c.56) defines certain terms and sets out when a pension “begins” (the day after the last day of service in respect of which the pension is payable) and how the increase applies to lump sums.

The increase is the percentage by which the Secretary of State for Work and Pensions has, by direction under section 151(1) of the Social Security Administration Act 1992 (c.5), increased the additional pension entitlements accruing to employees in respect of earnings after 5th April 1978.

For pensions which began before 9th April 2018 the increase is 2.4 per cent. For pensions which began on or after 9th April 2018 the increases (following the calculation set out in article 3) are as follows—

Table

Pensions Beginning	Pensions increase
9th April 2018 to 23rd April 2018	2.40%
24th April 2018 to 23rd May 2018	2.20%
24th May 2018 to 23rd June 2018	2.00%
24th June 2018 to 23rd July 2018	1.80%
24th July 2018 to 23rd August 2018	1.60%
24th August 2018 to 23rd September 2018	1.40%
24th September 2018 to 23rd October 2018	1.20%
24th October 2018 to 23rd November 2018	1.00%
24th November 2018 to 23rd December 2018	0.80%
24th December 2018 to 23rd January 2019	0.60%
24th January 2019 to 23rd February 2019	0.40%
24th February 2019 to 23rd March 2019	0.20%

Article 4 of the Order provides for increases on certain deferred lump sums which became payable on or after 9th April 2018 and before 8th April 2019.

The Order also makes provision for the amount by reference to which any increase in the rate of an official pension is to be calculated to be reduced by the amount equal to the rate of the guaranteed minimum pension entitlement deriving from the employment which gives rise to the official pension.

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.