Explanatory note

The Pensions (Increase) Act 1971led the Pensions (Increase) Acts 1920 to 1969; but for pensions “beginning” before 1969 the increase under the 1971 Act is related to the higher of the following, namely—

1. (a)

   “the 1969 standard”, that is to say, the figure obtained by applying to the basic pension the appropriate multiplier given by the Act (and related to changes in purchasing power between the year in which the pension began and 1st April 1969); and

2. (b)

   “the 1971 rate”, with the supplement mentioned below where payable.

The 1971 rate for any pension is a rate that takes account of the cumulative effect of increases under the repealed Acts; and the supplement is the equivalent of the special increase payable to the over-70 under section 2 of the 1962 Act (but under the 1971 Act extended for the purpose of the comparison referred to above to any pension other than a dependant's pension that only qualifies for an increase because payable to a child or a person receiving education or training). Generally speaking, a pension “begins” the day after the end of the service for which it is payable, even if it is a frozen pension, a widow's pension or the like that does not become payable until later.

The main purpose of this Order is, in accordance with section 6 of the 1971 Act, to enable the pensions for which the 1971 rate and the supplement may be relevant, and the amount of the rate and supplement for any of those pensions, to be ascertained without reference to the repealed Acts. The effect of the Order is however liable to modification under the power given by section 5(3) of the 1971 Act (corresponding to powers given by the repealed Acts and used in particular in relation to pensions not based on earnings).

The Order does not apply to pensions qualifying for increases under the Pensions (Increase) Acts 1920 and 1924; for these the 1971 rate is always the rate in payment. And pensions beginning after 1st April 1961, with some exceptions, qualify only for the increases under the Acts of 1965 and 1969, and the 1971 rate is necessarily less than the 1969 standard; the Order accordingly makes no provision for these pensions.

Certain pensions beginning after 1st April 1961 and based on average earnings calculated over periods beginning before April 1951 (or an earlier date) continued to qualify for increases under the Act of 1944 or the Act of 1956, and this applies to pensions beginning after the year 1968 or in the future. The Order deals (so far as relevant) with the 1971 rate of these pensions where they begin before the year 1969, and for the continuance of the increases where they begin later.