How it's paid
How your pension gets paid
Your Final Salary pension will be paid from the day you retire for the rest of your life. Pensions are currently paid monthly in advance directly into the bank or building society of your choice, on the first day of the month.
Income Tax is deducted from your pension in the same way that it is deducted from your salary under the Pay As You Earn (PAYE) system.
A payslip is only sent to you when your pension payment changes by £2 or more. Therefore, if you move house or change your account details, you'll need to let the Pensions Team know.
How your pension increases in retirement
When you retire your Final Salary pension receives regular increases, which help to protect its value from the impact of inflation.
Once in payment, increases on the Guaranteed Minimum Pension (GMP) benefits are provided in the State Pension with the exception of any built up after 5 April 1988. For this part the Scheme provides an increase each year in line with legislation (currently Consumer Prices Index (CPI) up to a maximum of 3%). If inflation exceeds 3%, a further increase may be provided within the State Pension.
GMP increases
Your pension in excess of the GMP will increase each year on 1 January following retirement. The increase in respect of Pensionable Service:
- From 1 January 2000 will be in line with the rise in the Retail Prices Index (RPI) up to a maximum of 5%.
- Before 1 January 2000 will be 5% a year.
If you have Pensionable Service before 6 April 1997, you'll have a GMP element to your pension. GMPs become due at age 60 for women and 65 for men.
If you've been in retirement for less than 12 months at 1 January, you'll receive a proportionate increase to your pension.
The same increases are applied to any spouse/registered civil partner's or dependant's pension.