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The Pensions Increase (Review) Order 2024

S.I. 2024/331 · Made 4 March 2024 · Extends to United Kingdom

Up to date with all changes known to legislation.gov.uk, revised to 8 April 2024.

PENSIONS

Made 4th March 2024

Laid before Parliament 8th March 2024

Coming into force 8th April 2024

The Secretary of State for Work and Pensions has, by virtue of section 151 of the Social Security Administration Act 1992f1, given a directionf2 that the sums mentioned in section 150(1)(c) of that 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 1975f3 and now vested in themf4.

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

S.I. 2024/242.

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 9(8) of the Social Security Act 1986 (c. 50) (which inserted subsection (5A)); 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 of the same Act, 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). Subsections 59(5ZA), (5ZB), (5ZC) and (7) were amended by S.I. 2014/560 and S.I. 2014/3229. Subsections 59(5ZB) and (7) were amended by S.I. 2014/3168. Subsections 59(5ZC) and (7) were amended by S.I. 2020/1143.

f4

By virtue of article 2(1)(c) and (d) of S.I. 1981/1670.

Contents

  1. 1Citation, commencement and extent
  2. 2Interpretation
  3. 3Pension increase: annual rate and lump sums
  4. 4Reductions in respect of guaranteed minimum pensions
  5. Signature
  6. Explanatory note

1Citation, commencement and extentI1

(1)

This Order may be cited as the Pensions Increase (Review) Order 2024 and comes into force on 8th April 2024.

(2)

This Order extends to England and Wales, Scotland and Northern Ireland.

F1[Note: There was an error in the making of this Order. As a result, further provision which supersedes the matters set out in this Order is made in the Pensions Increase (Review) (No. 2) Order 2024 ( S.I. 2024/372).] .

2InterpretationI1

(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 2024f1.

3Pension increase: annual rate and lump sumsI1

(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 2024, the pension authority may increase the annual ratef1 of the pension—

(a)

for a pension which began before 10th April 2023, by 6.7 per cent;

(b)

for a pension which began on or after 10th April 2023, by 6.7 per cent multiplied by—

A 12

where A is the number of complete months in the period between the beginning date of the pension and 8th April 2024.

(3)

In relation to a lump sum which is payable on or after 10th April 2023 but before 8th April 2024, the pension authority may increase the lump sum by 6.7 per cent multiplied by—

A 12

where A is the number of complete months in the period between the beginning date of the lump sum (or, if later, 10th April 2023) and the date on which it becomes payable.

4Reductions in respect of guaranteed minimum pensionsI1

(1)

Where—

(a)

a person is entitled to an increase in a guaranteed minimum pension on 8th April 2024; 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 provision of section 59A of the Actf1.

(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

Scott Mann

Amanda Milling

Two of the Lords Commissioners of His Majesty's Treasury

4th March 2024

Explanatory note

(This note is not part of the Order)

Under section 59 of the Social Security and Pensions Act 1975 (c. 60) (increase of official pensions) where the Secretary of State for Work and Pensions, under section 151(1) of the Social Security Administration Act 1992 (c. 5), directs that the sums in section 150(1)(c) of the 1992 Act 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 to be applied is the same as the percentage by which the Secretary of State for Work and Pensions has, by direction under the Social Security Administration Act 1992, increased the additional pension entitlements accruing to employees in respect of earnings for service after 5th April 1978.

For pensions which began before 10th April 2023 the increase is 6.7 per cent. For pensions which began on or after the 10th April 2023 the increases (following the calculation set out in article 3) are as follows—

Pensions beginningPensions increase
10th April 2023 to 23rd April 20236.7%
24th April 2023 to 23rd May 20236.14%
24th May 2023 to 23rd June 20235.58%
24th June 2023 to 23rd July 20235.03%
24th July 2023 to 23rd August 20234.47%
24th August 2023 to 23rd September 20233.91%
24th September 2023 to 23rd October 20233.35%
24th October 2023 to 23rd November 20232.79%
24th November 2023 to 23rd December 20232.23%
24th December 2023 to 23rd January 20241.68%
24th January 2024 to 23rd February 20241.12%
24th February 2024 to 23rd March 20240.56%

Article 3(3) of the Order provides for increases on certain deferred lump sums which become payable on or after 10th April 2023 and before 8th April 2024.

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 any 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.