Your LGPS pension is adjusted each year in line with the cost of living if you:
- Are aged 55 or over.
- Retired on ill health grounds, at any age.
- Are receiving a survivor’s pension.
This increase is often referred to as inflation proofing or index linking but will be shown on your pay slip as Pensions Increase.
It will be applied from the first Monday in April following the end of the tax year on 5th April, and will be measured by the percentage rise in the Consumer Prices Index (CPI) in the twelve months up to September each year.
The rates of pensions increase over recent years were:
7 April 2008: 3.90%
6 April 2009: 5.00%
12 April 2010: -1.4%
11 April 2011: 3.10%
9 April 2012: 5.2%
8 April 2013: 2.2%
7 April 2014: 2.7%
6 April 2015: 1.2%
11 April 2016: -0.1%
10 April 2017: 1%
9 April 2018: 3%
8 April 2019: 2.4%
6 April 2020 1.7%
12 April 2021 0.5%
11 April 2022 3.1%
10 April 2023 10.1%
No increase was paid in 2010 and 2016 due to negative CPI figures.
Pensions increase and GMP
The LGPS is contracted out of the State Second Pension (formerly known as SERPS - the State Earnings Related Pension Scheme). When you reach state pension age you will receive a notice from HM Revenue & Customs giving details of your Guaranteed Minimum Pension (GMP) (this is the amount that is guaranteed to be paid to you by the LGPS had you not been contracted out of the State Second Pension).
Your GMP is already included in the total pension you receive from Gwynedd Pension Fund. From state pension age, therefore, your pensions increase will be paid from 2 sources, HM Revenue & Customs and Gwynedd Pension Fund.
For example if you receive an annual pension of £3000 and £1000 of it relates to the GMP. The increase element on the £1000 would be payable as part of your State Pension and paid by HM Revenue & Customs while the other £2000 would be increased through your pension with Gwynedd Council.