The Pensions Increase (Review) Order 2015

EXPLANATORY NOTE

(This note is not part of the Order)

Under section 59 of the Social Security Pensions Act 1975 (c.60), the Treasury have to provide by Order for the increase in the rates of public service pensions. The Pensions (Increase) Act 1971 (c.56) defines certain terms and sets out when the pension “begins” (the day after the last day of service in respect of which the pension is payable) 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 a 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 7th April 2014 the increase is 1.2 per cent. For pensions which began on or after 7th April 2014 the increases (following the calculation set out in article 3(2)) are as follows—

Table 1

Pensions Beginning	Pensions Increase
7th April 2014 to 21st April 2014	1.2%
22nd April 2014 to 21st May 2014	1.1%
22nd May 2014 to 21st June 2014	1.0%
22nd June 2014 to 21st July 2014	0.9%
22nd July 2014 to 21st August 2014	0.8%
22nd August 2014 to 21st September 2014	0.7%
22nd September 2014 to 21st October 2014	0.6%
22nd October 2014 to 21st November 2014	0.5%
22nd November 2014 to 21st December 2014	0.4%
22nd December 2014 to 21st January 2015	0.3%
22nd January 2015 to 21st February 2015	0.2%
22nd February 2015 to 21st March 2015	0.1%

Article 3(3) of the Order provides for increases on certain deferred lump sums which became payable on or after 7th April 2014 and before 6th April 2015.

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.

An impact assessment has not been produced for this instrument as no significant impact on the cost of business or the voluntary sector is foreseen.