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I'm in classic, will my pension increase? - classic

Pensions in payment increase every year in line with the cost of living. All pensioners aged 55 or over get these increases. Preserved benefits are also increased to maintain their value up to the date they become payable.

You will also receive the cost-of-living increases if you are aged under 55 and if:

  • you retired because of ill health; or if
  • the pension is paid to a widow, widower or surviving civil partner; or if
  • the pension is paid for a child.

Example:

You retire in mid-October with an annual pension of £7,500.

The following April, the cost-of-living increase is 3.5%.

As you retired exactly halfway through the relevant 12-month period, the pension is increased proportionately (that is, by one half of the total increase – 1.75%).

During the second year, the cost of living increase is 4.2%. Your annual pension becomes £7,631.25 after six months and £7,951.76 a year later.

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