The railways pension increases every year according to orders published by the government. In recent years, the increases have been in line with the Consumer Prices Index, also known as CPI, figure from the previous September.

For the 2023/24 year, the railways pension will increase by up to 10.1%. This will be effective from 10 April 2023.

Will all retired members get the full 10.1% increase?

Unless your section rules specify otherwise you will receive the full increase but this will also depend on when you took your benefits or became a preserved pensioner.

If you took your benefits or became a preserved pensioner on or after 26 April 2022, you won’t get the full amount because you’ve been retired – or preserved – for less than a year. Spouses’ pensions increase in the same way.

If you have a guaranteed minimum pension (GMP), you also won't receive the full amount. This is explained in more detail later in this article.

You can check the increase you’ll receive using the information in table A.

Table A: 

How is the first pension payment for the 2023/24 tax year worked out?

Depending on when your pension is paid, you may receive part of your pension at the new four-weekly rate and part at the old rate. Table B shows how many weeks of your pension payment will be at each rate.

Table B:

Why don't all members qualify for the full 10.1% increase?

If you’re under age 65 on 10 April 2023 — the date the increase becomes effective — you’ll receive all of the increase from your railways pension.

But if you’re 65 or older on 10 April 2023, you may receive a lower increase from your railways pension.

This is because your pension may include some ‘guaranteed minimum pension’, also known as GMP, which may increase at a lower rate than your railways pension.

If you reached State Pension age before 6 April 2016, the government may top up your State Pension to reflect the lower level of increases provided on the GMP. Although some exceptions do apply to married women who paid reduced National Insurance contributions and certain pensioners who worked or live abroad. This top-up does not apply if you reached State Pension age on or after 6 April 2016.

What is ‘guaranteed minimum pension’ (GMP)?

If you were a member of the railways pension schemes between 6 April 1978 and 5 April 1997, you may have been ‘contracted out’ of the State Earnings Related Pension Scheme — also known as SERPS — which existed at that time and was later abolished.

This means that, if you were a member of a railways pension scheme during this period, you paid a lower rate of National Insurance contributions. In return, your railways pension scheme had to provide you with a GMP which was roughly the same as the pension you would have received in SERPS.

How is my GMP increased?

For membership up to 5 April 1988, the part of your pension which is GMP is not increased by your railways pension scheme, in line with the Rules of the Scheme. If you reached State Pension age before 6 April 2016, the government pays all of the increase for your pre-April 1988 GMP with your State Pension.

For membership after 5 April 1988, increases of up to 3% are paid by your railways pension scheme on the part of your pension which is GMP. If inflation is more than 3% and you reached State Pension age before 6 April 2016, any surplus would be paid to you by the government.