UK sets 3% rise to GMP 1988–97 from 6 April 2026

From 6 April 2026, a clear rule decides how a small but important slice of some older workplace pensions grows. The government has confirmed a 3% increase to the part of Guaranteed Minimum Pensions (GMP) earned between 1988–89 and 1996–97. This sits in the Guaranteed Minimum Pensions Increase Order 2026, made on 16 February 2026 and published on legislation.gov.uk, signed by Torsten Bell, Parliamentary Under Secretary of State at the Department for Work and Pensions.

Why now, and why 3%? Each year ministers review the general level of prices over the 12 months starting on 1 October. For 1 October 2024 to 30 September 2025, prices were 3.8% higher. Parliament then approved the Order under section 109 of the Pension Schemes Act 1993, and the rate set for the post‑1988 GMP slice from 6 April 2026 is 3%. That link-3.8% prices review but a 3% GMP rise-often prompts questions, so let’s make it plain.

First, what is GMP? If you were in a defined benefit (DB) workplace scheme that was ‘contracted out’ of the Additional State Pension between 6 April 1978 and 5 April 1997, your scheme had to promise you at least a minimum level of pension-the Guaranteed Minimum Pension. It sits inside your scheme pension and is split by the years you earned it. The Order we’re discussing covers only the ‘post‑88 GMP’ built up in tax years 1988–89 to 1996–97.

So why isn’t the increase 3.8%? The law caps the increase a scheme must pay each year on the post‑1988 GMP slice at up to 3%. If the official prices review is below 3%, schemes match that lower figure. If it’s above 3%, schemes pay 3% and no more under this Order. Because the government’s latest review came out at 3.8%, the cap bites and the Order sets 3%.

Who actually sees this change? People already receiving a DB pension that includes GMP earned in 1988–97 within Great Britain. The Order extends to England, Wales and Scotland; it does not extend to Northern Ireland. If your pension has no GMP element-or if your GMP was earned before 1988-this specific 3% rule does not apply to that part.

What about the other bits of your pension? GMP built up before 1988 is treated differently and is not increased by schemes under this Order. Pension earned after 5 April 1997 is not GMP at all; it follows your scheme’s own indexation rules and separate legislation. That is why two people in the same scheme can see different percentages applied to different slices of their pension.

Here’s a simple example to make it concrete. Suppose £2,000 a year of your scheme pension on 5 April 2026 is the 1988–97 GMP slice. From 6 April 2026, your scheme must increase that slice by 3% to £2,060. The rest of your pension may go up by a different percentage according to your scheme’s rules. What this means for you: the 3.8% prices review does not force your scheme to raise the post‑1988 GMP slice above 3%.

Where does the 3.8% figure come from? In the legislation.gov.uk record of the Order, the Department for Work and Pensions notes that the general level of prices rose by 3.8% over the 12 months beginning 1 October 2024 and ending 30 September 2025. That time window is the standard yardstick used for these annual pension adjustments across Great Britain.

How the decision was made. A draft of the Guaranteed Minimum Pensions Increase Order 2026 was laid before and approved by both the House of Commons and the House of Lords, as required by section 109 of the Pension Schemes Act 1993. After approval, the Minister signed it on 16 February 2026, with the change taking effect on 6 April 2026-the first day of the 2026–27 tax year.

How to read your pension paperwork. Look for terms such as ‘GMP (post‑88)’ or ‘GMP accrued 1988–97’. That line should rise by 3% on or after 6 April 2026. Your scheme administrator can confirm the pounds and pence on your next payment or annual statement, and explain why other parts of your pension might show a different increase.

A note for learners and administrators. The explanatory note on legislation.gov.uk says no significant impact is expected on the private, voluntary or public sector, so no full impact assessment was produced. Useful vocabulary: ‘accrual’ is what you earned each year in the scheme; ‘earnings factors’ are the pay figures used to calculate that GMP; and the ‘relevant period’ here means the tax years 1988–89 to 1996–97 covered by this 3% rise.