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Document How are the cost of living increases applied to my pension if I take early retirement before age 55?

If you have taken actuarially reduced early retirement you will not receive any cost of living increases to your pension until you turn age 55. You will then receive all of the cost of living increases which have occurred since taking your pension.

For example, if you retired at 53 and we assume that each year the cost of living increase would be 2.5%.  This increase would not be applied at 54, but at 55 your pension would increase by 5%.  In subsequent years your pension would continue to increase by 2.5%.  This example uses a hypothetical figure of 2.5% for each yearly increase but in practice this will change from year to year.

There may also be a lump sum payable if your benefits were calculated using a pensionable pay figure that ended 16 days or more before payment was due, for example, deferred members who left the NHS pension Scheme but did not claim their pension straight away. The lump sum is increased by the same percentage as the pension.

If you are due an additional lump sum you will be contacted by NHS Pensions to advise of the amounts and the affect it has had on your Lifetime Allowance (LTA).

If you have any queries with regards to the payment of this lump sum please contact NHS Pensions on 0300 330 1346.

This would not apply if you have taken your pension on ill health grounds rather than actuarially reduced early retirement. Pension increases are paid on ill health pensions, regardless of the member's age, from the date of commencement of the pension.

For more information on pension increases, please see the Retirement Booklet on our website.

cpi, cost of living, arer before 55, early retirement before 55
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