Teachers Pension Scheme and CPI increase

tigerspill

Hi,

My wife will be taking her pension this Friday (10th April) which is obviously after the 6th April when the 3.8% rise applies.

I understand that any rises when the pension is in payment will have their first increase apportioned.

As her pension was NOT in payment on 6th April 2026, and I assume she was still a deferred member on that day, will she receive the fill CPI 3.8% increase?

I understand that next year she may only get eleven twelfths as she wont have been in payment for the full 12 months (but 11 months and 20 days at that point).

Her quotation when she applied was done a few months ago before the actual increase was formally approved and this did not include ant increase.

Thanks

hyubh

https://forums.moneysavingexpert.com/discussion/6663187/teachers-pension-scheme-and-cpi-increase

Public service pensions do not have a concept of revaluation in deferment distinct from pension increases in payment. So if your wife is already deferred as you say, the first increase and its pro-rata has already happened.

tigerspill

https://forums.moneysavingexpert.com/discussion/comment/81954005#Comment_81954005

Thank you. When would this have happened?

She has been deferred for 5 years since 55 and her annual benefits statement each year (dated the previous December) always has the increase included. Had she not taken her pension, her next deferred benefits statement would include the 3.8% and dated 31st December 2025. The calculations for the quotation she received some time ago did not have any of this 3.8% included. I know this for certain due to two things - my own detailed calculations, and the fact the quotation was identical to the annual benefits statement provided in the summer of last year, long before the 3.8% increase was known.

Hence, we would expect that this increase should be paid now as the payment date has just passed. If not, when does this 3.8% get applied

daveyjp

Does the benefits statement contain a note that it is only a guide and the actual calculation will be done once a request is made to start drawing the pension?

tigerspill

https://forums.moneysavingexpert.com/discussion/comment/81954279#Comment_81954279

It does - it was received in August 2025 so definitely didnt include ant 2026 increase as this was long before the 2026 increase was known.

When her request to start the pension was made, the quotation received in early February 2026. The figures were identical to the earlier ABS and therefore, did NOT include any 3.8% 2026 rise. And I believe it could not have been included because, while the 3.8% was expected at that time, it was not formally agreed until the end of February 2026 and thus, no official correspondence could include this until after that formal agreement.

What I am trying to understand is that when her pension is paid (hopefully this month), should this increase be added (including the lump sum)? If not, when would it be taken into account.

On 6th April 2026, she was still a deferred member and entitled to annual CPI increases on that date. So to me, given that this 3.8% increase has not been included in any calculations to date, it should now be included as we are after 6th April, and that she should expect to see this when payment occurs.

The reason I am trying to get to grips with this is that based on past experience, I have zero confidence that TPS will get this right, so am trying to understand this better so we know if it is correct or incorrect when received.

So the timeline is -

August 2025 - Annual Benefits Statement received (obviously did not include 3.8% increase)

February 2026 - Application to put pension into payment. Quotation received identical to the earlier ABS and did not include the increase.

6th April 2026 - 3.8% increase should take effect on deferred teacher pensions

10th April 2026 - Pension into payment and lump sum to be received including the 3.8% increase

Late April 2026 - firstly monthly pension expected (apportioned based on 10th April start and including the 3.8% increase)

April 2027 - receive the 2027 increase based on the September 2026 CPI figure, apportioned to around 360/365 as she will not have had the full 12 months in payment (10th April 2026 to 5th April 2027)

Or am I way off here?

DRS1

You could always call TPS and ask. Or try the TPS Facebook group. Someone on there is bound to know.

tigerspill

https://forums.moneysavingexpert.com/discussion/comment/81954787#Comment_81954787

I could, but they are INCREDIBLY difficult to deal with.

There are many very knowledgible people on here who I though could help.

hyubh

https://forums.moneysavingexpert.com/discussion/comment/81954335#Comment_81954335

Like I said before, there will be no apportioning in 2027 because pension increases have been in effect since leaving, i.e. the first increase due an apportionment was the first one after leaving active membership, not the first one after coming into payment.

You're overthinking things, I would only expect a statement to include the 2026 increase if it was calculated on or after the increase date. The fact a statement produced in February didn't include it says absolutely nothing.

hyubh

https://forums.moneysavingexpert.com/discussion/comment/81954787#Comment_81954787

All public service schemes increase in exactly the same way, there is nothing TPS specific here.

tigerspill

https://forums.moneysavingexpert.com/discussion/comment/81955012#Comment_81955012

On the first point, I had misunderstood this so thank you for clarifying. I think I now understand this part.

I am still struggling to grasp the second statement. The first sentence makes sense in that the increase can't have been included until it happened earlier this week.

Surely then, because it wanst included in the Feburary statement means that it should be included in payments after 6th April - i.e. my wife's pension lump sum payable on the 10th should be what was quoted in February plus 3.8%?

Maybe I am not being clear in my question here.

Lets say that in February, the quotation was a yearly pension of £15,000 and a lump sum of £45,000 (three times the annual pension). Then what she should now expect would be a pension of £15,570 and a lump sum of £46,710. i.e. a 3.8% increase on the earlier quote. Ignore the fact that the annual pension will be reduced by 4 days (6th to 9th April)

Am I being really dumb here?

hyubh

it should be included in payments after 6th April - i.e. my wife's pension lump sum payable on the 10th should be what was quoted in February plus 3.8%

It will do, yes.