Increases and Bonuses

Annual pension increases

Each individual member’s pension is made up of different parts. How much an individual member’s pension will increase each year depends on how these different parts change.

Furthermore, following the announcement in July 2022 that members’ bonus pensions were to be protected with immediate effect (rather than from 2024), members’ existing bonus pensions can no longer be reduced. This means that the way that members’ pensions will increase in 2022 and 2023 has improved.

To help members understand how the pension increase worked in 2022, we have provided some illustrative examples (please click on the tabs below). It is important to note that these examples are illustrations only and that the actual increase to each member’s pension will be based on their own circumstances.

For a pensioner with GMP in payment, broadly speaking the MPS pension is made up of three different parts.

Guaranteed Pension (excluding GMP – see below) which increases in autumn each year in line with the Retail Prices Index (RPI) measure of inflation. The RPI increase for 2022 is 11.8%.
Protected Level bonuses which are the bonus pensions that members have been granted in the past. Historically these bonuses could be and have been reduced, but now that existing bonus pensions have been protected these can no longer be reduced.
Guaranteed Minimum Pension (GMP) is split into two amounts, one earned before 6 April 1988 (Pre 88) and one earned after 6 April 1988 (Post 88). Pre 88 and Post 88 GMPs increase differently.
Pre 88 GMP does not increase
Post 88 GMP increases in line with the Consumer Price Index (CPI) measure of inflation or 3% - whatever is less. The increase is applied in April each year.

The following illustrative example shows how a hypothetical member's pension will change at the 26 September 2022 pension increase date.

Element of pension	Weekly pension before the increase	Increase to pension on 26 September 2022	New weekly pension with effect from 26 September 2022
Guaranteed Pension (excluding GMP)	£56.50	£6.67 (= £56.50 x 11.8%)	£63.17
Protected Level Bonus	£22.00	-	£22.00
Pre 88 GMP	£13.00	-	£13.00
Post 88 GMP	£2.50*	-	£2.50
Total pension	£94.00	£6.67	£100.67

*This already includes the increase applied to Post 88 GMP in April 2022

There are some members whose MPS pension is only made up of Guaranteed Minimum Pension (GMP).

Typically, these are the spouses or partners of former members who have died and who chose, on the death of the member, to convert most of their widow/widower's pension into a one-off lump sum, leaving just the widow/widower's GMP pension in payment.

GMP pension is split into two amounts, one earned before 6 April 1988 (Pre 88) and one earned after 6 April 1988 (Post 88). Pre 88 and Post 88 GMPs increase differently.
- Pre 88 GMP does not increase
- Post 88 GMP increases in line with the Consumer Price Index (CPI) measure of inflation or 3% - whatever is less. The increase is applied in April each year.
The increase to Post 88 GMP is applied in April each year rather than September. So, where members only have a GMP pension in payment, they will not receive an increase to their pension on 26 September 2022.

Element of pension	Weekly pension before the increase	Increase to pension	New weekly pension from 26 September 2022
Guaranteed Pension	£72.00	£8.50 (= £72.00 x 11.8%)	£80.50
Protected Level Bonus	£22.00	-	£22.00
Total pension	£94.00	£8.50	£102.50

Pension Increases and Bonuses

Annual pension increases

Pension increases & bonus payments

Pension Increases and Bonuses

Annual pension increases

Pension increases & bonus payments

Pensioners with no GMP in payment

Pensioners with GMP in payment

Pensioners with only GMP in payment