Treasury makes the Pensions Increase (Review) Order 2026

The Treasury made the Pensions Increase (Review) Order 2026 on 9 March 2026, setting the annual increase to public service pensions in payment¹. It extends to England and Wales, Scotland and Northern Ireland¹.

Under the order, the pension authority may increase the annual rate of an official pension for a pension which began before 7 April 2025 by 3.8 per cent¹. For a pension which began on or after 7 April 2025, the increase is 3.8 per cent multiplied by a fraction, where A is the number of complete months between the beginning date of the pension and 6 April 2026¹. The order also allows the pension authority to increase certain lump sums payable on or after 7 April 2025 but before 6 April 2026 by 3.8 per cent multiplied by a similar fraction¹.

The explanatory note sets out the resulting increases for pensions that began on or after 7 April 2025¹:

The order states that where a person is entitled to an increase in a guaranteed minimum pension on 6 April 2026, and that entitlement arises from an employment from which entitlement to the official pension also arises, the amount by reference to which any increase is calculated must be reduced by an amount equal to the rate of the guaranteed minimum pension, unless the Treasury otherwise direct¹. A separate reduction applies where a person becomes entitled to a guaranteed minimum pension on the death of a spouse or civil partner¹.

The explanatory note records that 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 foreseen¹.

Why it matters for households

The order applies to public sector pension schemes and covers pensions that began before 6 April 2026¹. For someone whose pension started before 7 April 2025, the annual rate may rise by 3.8 per cent from 6 April 2026¹.

The order also affects certain lump sums payable between 7 April 2025 and 6 April 2026, which may be increased on the same scaled basis¹. Where a guaranteed minimum pension is involved, the amount used to calculate the increase is reduced by the rate of that guaranteed minimum pension, so the increase applied to the pension is smaller than the headline percentage in those cases¹.

The increase is the same percentage by which the Secretary of State for Work and Pensions has directed that additional pension entitlements accruing for service after 5 April 1978 are increased¹. The order does not cover state pension rates, and no figure for the state pension has been reported here.

What happens next

The order comes into force on 6 April 2026, which is when the increases take effect¹. No further steps are set out in the order.