Do final salary pensions increase? Usually yes once paid: the law sets a minimum tied to prices, capped according to when the pension was earned.
Do final salary pensions increase with inflation once they are paid?
Mostly, yes, though not always in full. MoneyHelper says "The pension will also usually increase every year once you’re receiving it." The size of the rise comes from three places: a legal minimum for private-sector schemes, whatever the scheme's own rules promise on top, and a yearly Treasury order for public service schemes.
The legal minimum follows consumer prices but is capped, so in a year of high inflation a private-sector pension can rise by less than prices. Which cap applies to which part of your pension depends on when you earned it. If you would rather have someone go through your own figures, use the call-back form here: an FCA-authorised adviser rings back free and can sort your service into the right slices.
The sections below take the private-sector minimum first, then scheme rules, the parts of a pension the minimum leaves out, and public service schemes. For how the pension is worked out in the first place, see what a final salary pension is.
The legal minimum: how much a defined benefit pension must rise each year
For private-sector schemes the minimum comes from section 51 of the Pensions Act 1995. It covers a pension from a scheme that "is not a public service pension scheme", and it applies to pension attributable "to pensionable service on or after 6 April 1997". For that part the Act says the pension "must be increased annually by at least the appropriate percentage."
The appropriate percentage depends on when the service was built up. The Act sorts pension into two categories, X and Y, around a "commencement day": 6 April 2005, when the Pensions Act 2004's changes to annual increases came into force. Category X covers a pension already being paid before that day and pension earned before it; category Y is pension wholly earned on or after it. Each category has its own default percentage, taken from the same section:
(a) in the case of a category X pension, 5% per annum, and (b) in the case of a category Y pension, 2.5% per annum.
— Pensions Act 1995, section 51, accessed 21 October 2026
Each percentage is the lesser of a price rise and that cap. The price measure is the Secretary of State's figure for the increase in the general level of prices in Great Britain over the period ending on 30 September, set out each year in the Occupational Pensions (Revaluation) Order. A pension built over several periods is split: "each of those parts of the pension is to be treated as if it were a separate pension." For increases made in 2026 the figures are these:
| Where the pension was earned | Cap on the yearly rise | Figure for increases in 2026 |
|---|---|---|
| Before 6 April 1997 | Section 51 does not cover this part; scheme rules decide (a GMP has its own rule, below) | Ask the scheme |
| 6 April 1997 to 5 April 2005 | 5% | 3.8% |
| From 6 April 2005 | 2.5% | 2.5% |
The 2026 figures are the 2025 Revaluation Order's entry for the period 1 January to 31 December 2025, which gives 3.8% as the higher percentage and 2.5% as the lower. The Act uses whichever Order is in force on the day the increase is made, so a pension that rises in a different month, or in a later year, can be on a different figure.
The increase does not have to arrive on one fixed date. The first one must take effect "not later than the first anniversary of the date on which the pension is first paid", and later ones "at intervals of not more than twelve months". Your scheme sets the month.
Scheme rules that pay more, or pay by a different index
The Act's words are "at least", so the statutory figure is a floor. A scheme whose rules give a rise by reference to the consumer prices index, or the default percentage if lower, meets the duty on that basis; the Act describes this as the rule being "increased at intervals of not more than twelve months by at least" that measure. A scheme may therefore promise more than the minimum, or promise the same thing in its own words.
Some pensions are tied to the retail prices index instead. The Act protects such rules: they count if the pension has always been increased by at least "the percentage increase in the retail prices index" or the default percentage if lower, since "the beginning of 2011 or, if later, the time when the pension became a pension in payment". So two people with the same pension on paper can be on different indexes, depending on whose rules apply.
Whether your scheme beats the minimum, and by which index, is written in its rules and in the booklet or letter that came with your pension. If the wording is still unclear after that, use the enquiry form; an FCA-authorised adviser rings to explain, without charge, what that rule means for your pension. If you are weighing a swap of future rises for a bigger starting pension, that is a separate decision covered in pension increase exchange.
What the yearly rise leaves out: extra contributions, pension credits and the GMP
Section 51 does not reach every pound of a pension. It "does not apply to any pension or part of a pension which is attributable (directly or indirectly) to a pension credit or which, in the opinion of the trustees or managers, is derived from the payment by any member of the scheme of voluntary contributions." Pension credits are covered under pensions on divorce and extra contributions under AVCs into a final salary pension. Section 51 sets no minimum rise for those parts, so check what your scheme's rules say.
A guaranteed minimum pension, the part of an older pension earned in the contracting-out years, has its own rule. The 1993 Act makes the increase on the 1988 to 1997 part the lesser of the rise in prices and 3 per cent, and the Guaranteed Minimum Pensions Increase Order 2026 "specifies the percentage for the annual increase as 3 per cent." That order came into force on 6 April 2026. Read whether a GMP increases and what a GMP is for the detail and for the part earned before 1988.
Public service schemes: the Treasury's yearly pensions increase
Section 51 leaves public service schemes out, so their pensions rise under a different route. The Treasury makes a yearly order under section 59 of the Social Security and Pensions Act 1975, and the Pensions (Increase) Act 1971 defines the key terms, including when a pension begins and how the increase applies to lump sums.
GOV.UK states the position for 2026:
Public service pensions which have been in payment for a year will be increased by 3.8% from 6 April 2026 in line with the September-to-September increase in the Consumer Price Index (CPI).
— GOV.UK, Public service pensions increase: 2026, accessed 21 October 2026
A pension that has been in payment for less than a year gets "a proportionate amount depending on the number of months it has been in payment". Under the Pensions Increase (Review) Order 2026, "the pension authority may increase the annual rate" by 3.8% for a pension that began before 7 April 2025, and by a proportion of it for one that began later. Where the person also has a guaranteed minimum pension from the same employment, the Order says the amount the increase is worked on "must be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury otherwise direct".
Which rule applies to you depends on which scheme paid the pension, and the scheme's administrator can confirm it.
How to find out what your own pension will rise by
Because the rise depends on how much of the pension falls into each slice of service, and on the scheme's rules, the administrator is the one who can give your figure. Ask in writing, and ask for these points: how much of the pension was earned before 6 April 1997, between then and the commencement day, and after; which index and cap the scheme applies; the month the rise is made; whether any of the pension is a guaranteed minimum pension; and whether any part comes from extra contributions or a pension credit.
Keep the answers beside your last statement. If you are still some way from claiming, what happens before payment is a different calculation, explained in deferred final salary pensions, and checking whether your scheme is final salary comes first if you are unsure which kind you hold.
When the replies are in, the form here books a free call, and an FCA-authorised adviser can then set the yearly rises beside your other pensions and the State Pension.
If you have been offered a transfer out, the rises are part of what you would give up: the FCA lists losing the scheme's inflation protection among the risks, and says "The FCA and The Pensions Regulator (TPR) believe it’s in most people’s best interests to keep their DB pension." Regulations (SI 2015/742, regulation 5) require advice before transferring safeguarded benefits with a transfer value over £30,000. See whether to transfer.
Final salary pension increase questions
Are final salary pensions index linked?
Partly. The legal minimum follows a price measure, but with a cap of 5% or 2.5% depending on when the pension was earned. Whether yours is index linked without a cap is a matter for the scheme's rules.
Do all defined benefit pensions increase every year?
Not necessarily. Section 51 requires an increase only on private-sector pension earned from 6 April 1997, so for older service the scheme's rules decide, apart from any GMP, which has its own percentage. Public service schemes follow the Treasury order, and your administrator can say which rules cover yours.
What was the final salary pension increase in 2026?
Public service pensions in payment for a year rose by 3.8% from 6 April 2026, according to GOV.UK. For private-sector schemes the 2025 Revaluation Order gives 3.8% and 2.5% as the two statutory minimums (schemes may pay more), and the Guaranteed Minimum Pensions Increase Order 2026 sets 3% for the post-1988 GMP.
How often must a defined benefit pension go up?
At intervals of not more than twelve months, once the first increase is made, according to the Pensions Act 1995. The first must take effect by the first anniversary of the pension starting.
Is there a final salary pension increase calculator?
The figure depends on how your service divides across the dates above and on your scheme's rules, so the scheme's own statement is the reliable number. Should the statement itself be hard to follow, a no-cost call with an adviser, set up by the form here, lets someone read it with you.
Does a deferred final salary pension increase before it is paid?
Usually, yes, by a separate revaluation rule. See deferred final salary pensions.
Your next step
Ask your administrator the five questions above, then read the answers against your next statement. If the answers raise a question about your whole retirement picture, such as how rising pension income sits with the State Pension and tax, a person can talk it over with you: request a call-back on this page's short form, and the conversation with an FCA-authorised adviser costs you nothing. You can also read about how the State Pension interacts with a final salary pension and whether a final salary pension can go down.
Sources, read 21 October 2026: Pensions Act 1995, sections 51, 51ZA and 54; Pension Schemes Act 1993, section 109 and Schedule 3 paragraph 2; Occupational Pensions (Revaluation) Order 2025 (SI 2025/1211); Guaranteed Minimum Pensions Increase Order 2026 (SI 2026/133); Pensions Act 2004 (Commencement No. 2) Order 2005 (SI 2005/275); Pensions Increase (Review) Order 2026 (SI 2026/256); GOV.UK, Public service pensions increase: 2026; FCA, Considering a defined benefit pension transfer; MoneyHelper, Defined benefit pension schemes explained, read via the Internet Archive.