Civil Service Pensions will rise by 3.5% from April next year (2027), following today`s ONS announcement of the September increase in the Consumers Prices Index (CPI). The rate of inflation increased from 3.1% in August, reflecting higher energy prices.
Civil Service pension increases are determined each year by the preceding September CPI figure (announced in mid-October), underpinned by legislation in the Social Security Act 1975 that links the increase to Social Security benefit increases which are linked to the CPI measurement of inflation. Prior to 2011 the link was with the higher Retail Prices Index, which is no longer recognised as “an appropriate measure of inflation”.
The 3.5% increase will only apply to Civil Service pensions that have been in payment for at least 12 months, otherwise pro-rata increases will apply.
The State Pension, payable from age 67, is expected to rise by 3.9% from April next year under the ‘Triple-Lock’ that gives the higher of: CPI inflation; Average Earnings growth; or 2.5%. Average earnings rose by 3.9% (including bonuses) in the past year (averaged out over May-July). The State Pension increase will be formally confirmed by the Chancellor, John Healey at his first Autumn Budget Statement on 28 October. This will apply to both the basic rate of State Pension (pre-April 2016) and the new rate of State Pension (post April 2016).
