Public Service Pension Scheme Indexation and Revaluation 2024

(Limited Text - Ministerial Extracts only)

Thursday 25th January 2024 Written Statements

[The Chief Secretary to the Treasury (Laura Trott)]

Public service pensions continue to be among the very best available.

Legislation governing public service pensions in payment requires them to be increased annually by the same percentage as additional pensions (state earnings related pension and state second pension). Public service pensions will therefore be increased from 08 April 2024 by 6.7%, in line with the annual increase in the consumer prices index up to September 2023, except for those public service pensions which have been in payment for less than a year, which will receive a pro-rata increase.

Separately, in the career average revalued earnings public service pension schemes introduced in 2014 and 2015, pensions in accrual are revalued annually in relation to either prices or earnings depending on the terms specified in their scheme regulations. The Public Service Pensions Act 2013 requires HMT to specify a measure of prices and of earnings to be used for revaluation by these schemes.

The prices measure is the consumer prices index up to September 2023. Public service schemes which rely on a measure of prices, therefore, will use the figure of 6.7% for the prices element of revaluation.

The earnings measure is the whole economy year-on-year change in average weekly earnings (non-seasonally adjusted and including bonuses and arrears) up to September 2023. Public service schemes which rely on a measure of earnings, therefore, will use the figure of 7.7% for the earnings element of revaluation.

The effective date of revaluation listed in the order is 1 April 2024, but some schemes have chosen to move their effective revaluation date to 6 April 2024 in order to manage interactions with the annual tax allowance.

Revaluation is one part of the amount of pension that members earn in a year and needs to be considered in conjunction with the amount of in-year accrual. Typically, schemes with lower revaluation will have faster accrual and therefore members will earn more pension per year. The following list shows how the main public service schemes will be affected by revaluation: