UK sets 2026 rules for final salary pension revaluation

Here’s the update many defined benefit scheme members wait for each year: the UK has now set the official revaluation rates that bring past service up to date for anyone reaching their scheme’s normal pension age in 2026. The measure is the Occupational Pensions (Revaluation) Order 2025. It was made on 19 November 2025, laid before Parliament on 21 November 2025, applies in England, Wales and Scotland, and comes into force on 1 January 2026.

Why does this matter? If you have a final salary (defined benefit) pension and you left or paused active membership before you take it, the amount you earned then is increased so it doesn’t fall behind prices. That uprating process is called revaluation. This Order sets the actual percentages you use for the 1986–2025 revaluation periods when your pension starts in 2026.

A quick primer to place terms. Defined benefit (DB) schemes promise a pension worked out from your salary and years of service. Defined contribution (DC) schemes build a pot; they are not covered by this Order. Revaluation happens before your pension starts; indexation is the separate, in‑payment increase after it starts. If you remember one thing, make it this: revaluation protects the value of what you already earned by the time you leave.

The law tells trustees how to do DB revaluation. Under Schedule 3 to the Pension Schemes Act 1993, schemes using the final salary method take the pension you had earned at the date you left and then apply a revaluation percentage for the period from leaving to the year your pension starts. The Secretary of State sets those percentages each year by Order, so everyone is working from the same rulebook.

The 2025 Order lists, for each calendar “revaluation period” between 1 January 1986 and 31 December 2025, a higher revaluation percentage and, where relevant, a lower percentage. Pre‑2009 periods don’t have a lower figure. Your scheme rules tell you which column to use; many older service blocks use the higher column, while service subject to post‑2008 rules may use the lower column. What this means: you match the year you left pensionable service to the correct line and pick the right column for your scheme.

How to read it when you’re doing the sums. Step one, find the calendar year that includes the date you left pensionable service. Step two, check your scheme booklet to see whether it uses the higher or lower statutory revaluation for service in that period. Step three, apply the percentage from the table to the pension amount you had at leaving. In simple form: revalued pension in 2026 = deferred pension at leaving × (1 + revaluation percentage).

Worked example for learners, numbers for illustration only. Imagine your deferred pension at leaving on 30 June 2012 was £5,000 a year. If your scheme uses the higher percentage and the 2012 revaluation percentage in the table were 32.0% (illustrative), your pension at 2026 would be £5,000 × 1.320 = £6,600 before any scheme‑specific adjustments such as early/late retirement factors.

A second example to show the lower column. Suppose you left on 31 March 2015 with a £8,400 deferred pension and your scheme uses the lower percentage for post‑2008 service. If the table showed 21.0% (illustrative) for the 2015 period, the 2026 figure would be £8,400 × 1.210 = £10,164. Always use the actual percentage from the Order’s table for the year you left; our numbers here are only to demonstrate the method.

Common questions we hear in seminars. Does this change what you earn each year while active? No-the accrual formula and your normal pension age are set by your scheme. Does this affect DC pots? No. Does this change the increases you get once the pension is in payment? No-that’s indexation, a different legal requirement. Quick checkpoint: revaluation is before your pension starts; indexation is after.

If you left before 2009, there’s one less decision to make: the Order says it isn’t necessary to specify a lower revaluation percentage for periods that start before 1 January 2009, so you’ll use the single figure shown for your year. If you left from 2009 onwards, your scheme rules will determine whether you use the higher or lower percentage for that period.

Teacher note for classroom practice: set up three short case studies-different leaving years, a stated deferred pension at leaving, and whether to use higher or lower. Ask students to identify the correct revaluation period, select the right column, and calculate the 2026 starting amount. Then compare results and discuss why the percentages can differ between years.

For the record and for your notes, the Occupational Pensions (Revaluation) Order 2025 was made on 19 November 2025, laid on 21 November 2025, and comes into force on 1 January 2026. It extends to England, Wales and Scotland. The Department for Work and Pensions describes it as a formula‑based update with negligible administrative impact; it was signed by Parliamentary Under‑Secretary of State Torsten Bell on 19 November 2025. If you want to explore the exact figures, look up the Order on the UK legislation website and read the table covering 1 January 1986 to 31 December 2025.