2020 No. 1392

Social Security

The State Pension Revaluation for Transitional Pensions (No. 2) Order 2020

Made

Laid before Parliament

Coming into force in accordance with article 1(2)

The Secretary of State for Work and Pensions has carried out a review in accordance with section 148AC(1) of the Social Security Administration Act 19921 and it appeared to the Secretary of State that the general level of prices in Great Britain has increased during the review period2.

Accordingly the Secretary of State makes the following Order in exercise of the powers conferred by sections 148AC(3) and 189(1) and (4) of the Social Security Administration Act 19923.

Citation and commencement1

1

This Order may be cited as the State Pension Revaluation for Transitional Pensions (No. 2) Order 2020.

2

This Order comes into force on—

a

24th December 2020 for the purpose of making an award on a claim for a state pension under regulation 15(1) of the Social Security (Claims and Payments) Regulations 1987 (advance notice of retirement and claim for and award of pension)4 to a person who reaches pensionable age5 on or after 13th April 2021; and

b

12th April 2021 for all other purposes.

3

In this article “a state pension” means a state pension under Part 1 of the Pensions Act 20146.

Increase in the general level of prices2

For the purposes of section 148AC(3) and (4) of the Social Security Administration Act 1992 (revaluation for transitional pensions under Pensions Act 2014), the increase in the general level of prices during the review period is 8.8 per cent.

Signed by authority of the Secretary of State for Work and Pensions

Guy OppermanParliamentary Under Secretary of StateDepartment for Work and Pensions
EXPLANATORY NOTE

(This note is not part of the Order)

This Order is made following a review under section 148AC(1) of the Social Security Administration Act 1992 (c. 5) (“the Administration Act”) (revaluation for transitional pensions under Pensions Act 2014 (c.19)).

The Pensions Act 2014 created a new state pension for persons reaching pensionable age on or after 6th April 2016 (see Part 1 of that Act). Pensionable age has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995 (c. 26). The part of a person’s new state pension based on their pre-April 2016 contribution record that exceeds the full rate of the new state pension as at 6th April 2016 is commonly referred to as a “protected payment”. Paragraph 6(5) of Schedule 1 to the Pensions Act 2014 provides for the revaluing of protected payments by increasing these payments by the “revaluing percentage” specified in the last order under section 148AC(3) of the Administration Act to come into force before the person reached pensionable age.

Under section 148AC(4) of the Administration Act the revaluing percentage is the percentage of the increase in the general level of prices since 6th April 2016 (the review period specified by section 148AC(2)).

Article 2 of this Order specifies the revaluing percentage as 8.8 per cent.

Article 1(2) ensures that the revaluation of protected payments will apply to persons reaching pensionable age on or after 13th April 2021, including those who make an advance claim for a state pension under regulation 15(1) of the Social Security (Claims and Payments) Regulations 1987 (S.I. 1987/1968).

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.