If HM Treasury confirms that the 10.1% Consumer Price Index (CPI) increase will be applied to public service pension schemes, your EAPF pension would be affected in the following ways.
Contributing members – the total amount of career average (CARE) pension* built up to 31 March 2023 would be increased by 10.1% on 1 April 2023; in addition:
- Changes to contribution bandings, which are also increased by CPI on 1 April each year, could mean that you end up falling into a lower contribution band, so you’d be paying less for your pension, but not losing out on any of the pension you build up!
- A 10.1% increase to your career average pension will also increase your pensions ‘growth’ for the 2022/23 tax year, which means there could be a higher chance that you could exceed the annual allowance for that tax year (please see ‘annual allowance’, below)
*this includes any additional pension you may have bought up to 31 March 2023, or any transfers into the Scheme between 1 April 2014 and 31 March 2023 where you acquired an amount of ‘earned pension’, rather than final salary membership.
Deferred and pensioner members - If you’ve had a deferred pension or have been receiving a pension from the EAPF for at least full year before April 2023, these would increase by 10.1% on 10 April 2023. However, if you haven’t had either for a full year before April 2023, then you might receive a smaller increase.