Defined Benefit GMP Increase Rates In Payment
Published / Last Updated on 03/06/2020
Safeguarded Rights ‘Guaranteed Minimum Pension’ GMP (Contracted Out of SERPS) part of your pension and the legal 'in payment' increase rates when retired i.e. when being paid out to you as a pension.
Increase rates depend upon when you earned/built up/accrued the pension rights:
Pre 88 GMP: Rights earned before 6 April 1988 will not be increased, they are level in payment. The State used to pay for inflation increases via a top up to your state pension but not any more.
Post 88 GMP: Your pension scheme must increase your GMP part of your pension when being paid to you as a pension in line with the Consumer Prices Index (CPI) capped at a maximum of 3%) for rights built up between 6 April 1988 and 5 April 1997.
After April 1997: Limited Price Indexation (LPI) for all pension in payment types (see Excess over GMP Pensions In payment) video = Inflation capped at 5%pa and then reduced to 2.5% pa in 2005.
