Ministers have set the statutory revaluation percentages for defined benefit occupational schemes for 2026 retirements. The Occupational Pensions (Revaluation) Order 2025 was made on 19 November 2025, laid before Parliament on 21 November, and comes into force on 1 January 2026. It applies in Great Britain and is signed for the Department for Work and Pensions by the Parliamentary Under Secretary of State, Torsten Bell.
The legal basis is section 182(2) and Schedule 3 to the Pension Schemes Act 1993. Each year the Secretary of State must specify revaluation percentages for every “revaluation period” beginning on 1 January 1986 and ending with 31 December before the order. These figures underpin the final salary method for statutory revaluation of deferred defined benefit entitlements.
For 2026 retirements, administrators match the member’s complete years between leaving service and normal pension age to the order’s corresponding revaluation period. Statute defines the higher revaluation percentage as the lesser of measured price inflation over the reference period and a 5% a year compound maximum; the lower percentage, where applicable, is the lesser of the same inflation measure and a 2.5% a year compound maximum.
As with previous instruments, the order extends to England, Wales and Scotland; Northern Ireland legislates separately. Defined benefit occupational schemes are in scope; defined contribution arrangements are outside the instrument.
For the one‑year revaluation period ending 31 December 2025, the higher percentage reflects the Secretary of State’s assessment of price inflation over the 12 months to September 2025, subject to the 5% cap. The Office for National Statistics reported CPI inflation of 3.8% in September 2025, which would not breach that cap. Where the lower percentage is used for post‑2009 accrual, the 2.5% limit applies.
Worked example: a member who left pensionable service on 30 June 2020 and reaches normal pension age on 30 June 2026 has six complete years in the pre‑pension period. Administrators identify the six‑year revaluation period and apply the higher percentage up to the 5% compound maximum for relevant pre‑2009 accrual, and the lower percentage up to 2.5% for accrual from 6 April 2009, as required by statute.
The order does not specify a lower revaluation percentage for revaluation periods that begin before 1 January 2009. This reflects legislative changes introduced alongside the 2.5% lower maximum rate for later accrual, while the 5% higher maximum continues to apply to earlier service.
This instrument concerns revaluation of deferred entitlements. It should not be confused with increases to pensions in payment under separate legislation, or with the Public Service Pensions Revaluation Order, which for 2025 set a price element of 1.7% and an earnings element of 4.5% for unfunded public service schemes on an April–March cycle.
Operationally, the Department for Work and Pensions classifies this as a routine annual update to a regime determined by a formula in primary legislation. No full impact assessment accompanies the order and the administrative effect is assessed as negligible. Trustees and administrators should refresh revaluation factors, update system parameters and schedule member communications for those reaching normal pension age during 2026.
In practical terms, the order provides the statutory minimum inflation protection for deferred final‑salary benefits of members reaching normal pension age in 2026. The appropriate percentage used in any case is the one specified for the revaluation period matching the member’s completed years to normal pension age, applied to the relevant service tranches as required by Schedule 3.