Pension payments

Your pension is payable throughout your lifetime from the day following your retirement.  For all new retirees it is paid monthly on, or about the 6th of the month, and is the payment in respect of that month (for example the payment made on 6 September 2012 is the pension due for the month of September 2012 and so on).  Therefore the majority of your pension is paid in advance.

There are some current pensioners who receive their pensions on the 28th of the month.  Where this is the case it should be noted that this represents the instalment due for the following month and so the whole pension is paid monthly in advance (for example the payment made on 26 September 2012 is the pension due for the month of October 2012 and so on).

Each monthly instalment will be paid direct to the bank or building society of your choice.  A 'pay slip' will only be sent at the time of your first payment and then only when your net pay changes by more than £1 from the previous month or there is another significant change.

Pensions in payment are reviewed on 1 April each year.  The level of increase will depend on the particular section of the Plan that you were a member of prior to retirement.  Typically the increase relates to increases in the Retail Prices Index ('RPI') but restricted at an upper level.  The increase in RPI is measured on the increase in the 12 months to 30 September immediately prior to the increase date.

From the age of State Pension Age the full increase will only apply to that part of your Plan pension (excluding non-increasing AVC pension) in excess of the Guaranteed Minimum Pension ('GMP').  This GMP is broadly equal to the benefit that you would have built up in the Earnings-Related part of the State Pension Scheme had you not been contracted-out as a member of the Plan.

The increases appropriate to this portion of your pension are shared by the State and by the Plan. All increases in respect of GMP earned before 6 April 1988 are paid by the State.  The first 3% of any increase in respect of the GMP earned after 6 April 1988 will be met by the Plan, with the balance (if any) up to the level of RPI being paid by the State along with your Basic State Pension.