Pensions Increase

UKAEA scheme pensions are normally increased each year by a percentage amount. The level of increase is usually made known in March and applied in April.

Who qualifies for the increase?

Pension increases are applied to all UKAEA pensions where the pensioner is aged 55 or over. Widow’s, widower’s, children’s or invalidity pensions or those who retired on grounds of ill health also receive pensions increase regardless of age.

Increases are also applied to continuing annual payments to those over age 55. If you receive a continuing annual payment below age 55 pension increases are not applied to the continuing annual payment until age 55, when all increases since your continuing annual payment began are also applied.

What if I have only just retired?

If your pension from the UKAEA scheme started during the year prior to the increase, your pension will be increased by one twelfth of the percentage increase for each completed month from your retirement to the date of the increase.

Will all of the increase be paid with my UKAEA pension?

Some of your entitlement to pensions increase may be paid with your State pension by the Department of Work and Pensions and some with your UKAEA pension. If your pension is based wholly or partly on service between 6 April 1978 and 5 April 1997, then your UKAEA scheme pension may include a guaranteed minimum amount to cover this period when the UKAEA scheme was contracted out of the Second State Pension (S2P). This amount is called the Guaranteed Minimum Pension (GMP), and for the UKAEA scheme pensions the pension increases on GMPs earned up to and including 5 April 1988, will be paid by the Department of Work and Pensions. However, the UKAEA pension scheme is required to increase any GMPs earned from 6 April 1988 until 5 April 1997 by the lower of inflation or 3 per cent. Pension Increases above 3 per cent will normally be paid by the Department of Work and Pensions. Pension increases paid by the Department of Work and Pensions on the guaranteed minimum pension are paid with your State Retirement Pension, State widow’s, widower’s, or invalidity pension and not with your UKAEA scheme pension. Any pensions increase due on the balance of your UKAEA pension will be paid by the Pensions Administration Office, Thurso.

Your entitlement to pension increase will be paid in full by the UKAEA pension scheme if you:-

1. are resident in certain countries overseas; or
    
2. are deferring your State retirement after reaching State pension age, so that you do not receive the State retirement pension; or
     
3. are temporarily disqualified from receiving State retirement benefits; or your pension is reduced to pocket-money pension rate because of a long spell in hospital; or
     
4. have an additional pension from the State scheme which is less than the total GMP to which you are entitled (you will receive from Department of Work and Pensions) a notice of entitlement which tells you what these amounts are); or
     
5. are a widower under 65 or whose late wife was under 60 when she died and you do not receive a widower's invalidity pension.

When does a pension or lump sum "begin" for the purpose of pensions increase?

A pension or lump sum usually begins for pensions increase purposes on the day after the last day of service in respect of which it is payable. Widow's, widower's and children's pensions awarded when a UKAEA scheme pensioner dies are treated as having begun on the same date as the pensions from which they derive.

PENSION SHARING ON DIVORCE

Pension credits calculated as part of a divorce settlement are increased from the time the former spouse reaches age 55 and applied once the pension is in payment.

What is the increase for 2004/05?

If your pension from the UKAEA scheme started before 27 April 2004, your pension will increase by 3.1% from 11 April 2005.