Pension Increase 2026 📈

Each year, the pension we pay you is adjusted to ensure it keeps pace with the cost of living.

HM Treasury issues a Pensions Increase Review Order, which confirms the amount of annual increase. This Order is currently linked to the Consumer Prices Index (CPI) figure from the previous September. 

CPI in September 2025 was 3.8% which means that your LGPS pension will increase by 3.8% from 6 April 2026 (The first Monday of the new tax year). 

Who Does This Affect?

The increase applies to:

• Pensions currently being paid
• Deferred pensions (pensions you haven’t yet claimed)
• CARE pension accounts (Career Average Revalued Earnings pensions)

Active and deferred members:

Your Annual Pension Statement (issued at the end of August 2026) will confirm your personalised pension increase for this year.

 💡 To view your previous Annual Pension Statements, simply log into your My Pension account:

You can log in or register at: My Pension Login - Highland Council

For pensions currently in payment:

✅  When will I see the increase?

You can view your monthly pension payment advice by logging into your My Pension account. You can log in or register at: My Pension Login - Highland Council

✅  Pension increases are normally paid to:

• pensioners who are aged 55 or over
• pensioners who retired through ill health at any age
• spouses and dependants of former pensioners

✅  If your pension has been in payment for less than a year:

• you will only receive part of the increase this year. The table below shows how much your pension will increase by based on the date your pension started:

State Pension Increase

The Government has confirmed that the State Pension will continue to rise in line with the 'triple lock'. The triple lock guarantees that increases will be the highest of the three measures:

• CPI inflation, 
• average earnings growth, or
• 2.5%.

This means the State Pension will increase by 4.8% (in line with average earnings growth) from April 2026.

Pensions Increase and Guaranteed Minimum Pension (GMP)

Before 6 April 2016, the UK State Pension had two parts:

• Basic State Pension
• Additional State Pension – also known as SERPS (State Earnings Related Pension Scheme) or the State Second Pension (S2P)

 If you were a member of the Local Government Pension Scheme (LGPS) before 6 April 2016, you were contracted out of the Additional State Pension. This meant:

• You and your employer paid lower National Insurance (NI) contributions.
• In return, the LGPS guaranteed to provide you with a pension that was at least equal to what you would have received from the Additional State Pension, you would have otherwise built up.
• This is called the Guaranteed Minimum Pension (GMP) and relates to service between 1978 and 1997.

Your GMP is already included in the total pension you receive from Highland Pension Fund.

✅ How annual increases were paid historically (Pre 2016 State Pension Age)

Once you reached State Pension Age, the annual pension increases were shared:

• The State paid increases on part of your GMP
• Highland Pension Fund paid increases to the rest of your pension.

If you reached State Pension Age before 6 April 2016 and have a pre-1988 GMP, the State continues to pay any increases on that portion through your State Pension. In these cases, the value of the pre‑1988 GMP is deducted from your Highland Council pension before the Fund applies its annual increase.

✅ New arrangements (Post 2016 State Pension Age)

For members reaching State Pension Age on or after 6 April 2016, the previous system of shared indexation ended. Under the current State Pension rules:

• The State no longer pays any increases on GMP.
• Highland Pension Fund now pays the full annual pension increase, covering both the non‑GMP element and the GMP element of your pension.

This means you will not receive any GMP‑related increases from the State; all increases will be applied directly by the Fund.

✅ Topping up your State Pension

The amount of State Pension you get is based on your record of National Insurance Contributions (NICs). 

You may be able to top up your State Pension by:

• Checking for any gaps in your NI record, and
• Paying voluntary National Insurance contributions for any missing years.

You can check your NI record by requesting a State Pension forecast or by checking your personal tax account. A personal tax account is a secure online service from HMRC:

• You can sign in, or set up a personal tax account at: https://www.gov.uk/personal-tax-account.
• You can contact HMRC by telephone on 0300 200 3300 (8.00am and 8.00pm, Monday to Friday).

More information about contracting out and how it affects your State Pension can be found on the Gov.uk website:

Contracted out of the Additional State Pension: What contracting out was - GOV.UK

Contracted out of the Additional State Pension: How contracting out affects your amount - GOV.UK