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. 5), directs the sums in section 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, sets out when a pension “begins” 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 12th April 2021 the increase is 3.10 per cent. For pensions which began on or after 12th April 2021 the increases (following the calculation set out in article 3) are as follows—
| Pensions Beginning | Pensions increase |
|---|---|
| 12th April 2021 to 26th April 2021 | 3.10% |
| 27th April 2021 to 26th May 2021 | 2.84% |
| 27th May 2021 to 26th June 2021 | 2.58% |
| 27th June 2021 to 26th July 2021 | 2.33% |
| 27th July 2021 to 26th August 2021 | 2.07% |
| 27th August 2021 to 26th September 2021 | 1.81% |
| 27th September 2021 to 26th October 2021 | 1.55% |
| 27th October 2021 to 26th November 2021 | 1.29% |
| 27th November 2021 to 26th December 2021 | 1.03% |
| 27th December 2021 to 26th January 2022 | 0.78% |
| 27th January 2022 to 26th February 2022 | 0.52% |
| 27th February 2022 to 26th March 2022 | 0.26% |
Article 3(3) of the Order provides for increases on certain deferred lump sums which become payable on or after 12th April 2021 and before 11th April 2022.
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.