Government has confirmed a 3 per cent increase to the post‑1988 element of Guaranteed Minimum Pensions from 6 April 2026 across Great Britain. The Guaranteed Minimum Pensions Increase Order 2026 (SI 2026/133) was made on 16 February 2026 under section 109 of the Pension Schemes Act 1993, after approval by both Houses of Parliament and a statutory review showing prices up 3.8 per cent over the 12 months beginning 1 October 2024.
Guaranteed minimum pensions arise in defined benefit occupational schemes that were contracted out of the Additional State Pension between 6 April 1978 and 5 April 1997. This instrument covers only the part of GMP attributable to earnings factors for the tax years 1988–89 to 1996–97, commonly referred to as the post‑88 GMP.
From April 2026, schemes must apply a 3 per cent uprating to the post‑88 GMP where it is in payment. Other elements of a member’s pension-such as any excess over GMP or post‑1997 accrual-are increased under scheme rules or separate legislation, so the total increase visible on an individual payslip may differ from 3 per cent.
The statutory framework caps the scheme’s GMP‑in‑payment liability at 3 per cent even when the price review exceeds that level. The Secretary of State’s review identified a 3.8 per cent rise in the general level of prices, but any indexation above 3 per cent for the post‑88 GMP is outside scheme obligations and sits within State Pension arrangements rather than this Order.
The Order extends to England, Wales and Scotland and comes into force on 6 April 2026. For most schemes this will fall within the first April payroll run; administrators should ensure the 3 per cent adjustment is reflected on and after that date for members with a GMP component in payment.
Operationally, administrators will need clean splits between pre‑88 and post‑88 GMP, confirmation of the affected earnings‑factor years, and tested payroll updates to calculate the capped increase. Member communications should make clear that the 3 per cent applies only to the post‑88 GMP slice and that different percentages may apply to other pension components under scheme rules.
For trustees and sponsors, the financial impact is contained by the cap, but cash‑flow and accounting projections for 2026/27 should be refreshed to reflect the 3 per cent GMP‑in‑payment increase. Actuarial teams may also wish to reconfirm any interactions with discretionary increases elsewhere in the scheme to avoid unintended layering.
The Department for Work and Pensions states that no full impact assessment has been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen. The Order is signed by Torsten Bell, Parliamentary Under Secretary of State, on 16 February 2026.