Information on pre-97 indexation

On this page, you'll find information and answers to the most frequently asked questions on pre-97 indexation.

What’s changing – pre-97 inflation increases

In November 2025 the government announced that it intended to change the law to enable the payment of inflation increases – also known as indexation – on pension benefits built up before April 1997, for Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) members.

Parliament has now passed legislation – in the Pension Schemes Act 2026 – that will enable us to pay inflation increases, up to 2.5 per cent per year, on pre-97 compensation / assistance payments to PPF and FAS members, where the original schemes provided for mandatory or statutory pre-97 increases.

This change will broadly align pre-97 indexation rules with those already in place for post-97 benefits for eligible PPF and FAS members.

Starting in the summer, we’ll be contacting all members who will be eligible for pre-97 increases, to make them aware of the changes to their entitlement.

Who will be eligible?

There are two groups of members who will be eligible for pre-97 increases.

Members whose scheme rules required the payment of indexation on benefits relating to pre-1997 service: Many schemes had rules that required mandatory inflation increases on pre-97 pension benefits. Members belonging to these schemes will, in most cases, start getting increases on all of their pre-97 benefits from the PPF and FAS.

We expect around 180,000 current PPF members and around 85,000 current FAS members will be eligible for increases on their pre-97 benefits, as a result of this change.

Members whose schemes provided pre-1997 indexation only on post-1988 Guaranteed Minimum Pensions: Some schemes provided pre-97 inflation increases only on Guaranteed Minimum Pension (GMP) benefits accrued on or after 6 April 1988 and no inflation increases on any other pre-97 pension benefits. GMP is a minimum level of pension that some pension schemes had to provide and mandatory increases were payable on GMP benefits built up between 6 April 1988 and 5 April 1997. Members of those schemes will, in most cases, get increases on a proportion of their pre-97 benefits from the PPF and FAS.

We expect around 39,000 current PPF members and around 27,000 current FAS members will be eligible for increases on their post-1988 GMP, as a result of this change.

A list of all eligible schemes can be found here: https://www.ppf.co.uk/our-members/pre97-schemes

When will pre-97 increases be paid?

We must apply increases to members’ payments in January each year. We want to ensure we deliver all of these changes as fast as possible for the large number of members who will benefit. However, it is not possible to deliver pre-97 increases for members who were only entitled to increases on post-88 GMP) by January 2027. This is because GMPs are not something that the PPF or the FAS currently administer and so the change is more complex.

For the group of members whose schemes provided mandatory inflation increases on pre-97 pension benefits beyond just the post-88 GMPs, the intention is to bring the legislation into force on 31 December 2026. This will mean that those whose PPF compensation or FAS assistance is in payment at that time, will receive their first pre-97 increase in January 2027.

For members who were only entitled to pre-97 increases on post-88 GMP, we currently expect that the legislation will come into effect from 31 December 2027. Those whose PPF compensation or FAS assistance is in payment at that time will receive their first pre-97 increase in January 2028. However, the increase we apply in January 2028 is expected to make an allowance for the delay.

If you are a PPF or FAS member who has not yet retired, you can log into our dedicated member website (www.ppf.co.uk/members for PPF and (www.ppf.co.uk/fasmembers for FAS), where you’ll find more information about how the introduction of pre-97 increases could affect your retirement options.

Where can I get further information?

We’ll continue to share information about our progress in delivering these changes. In the meantime, we’ve put together answers to the questions we’ve been asked most frequently by members and other stakeholders. We'll review this regularly and update as appropriate over the coming months.

FAQs for members

The government has passed new legislation, the Pension Schemes Act 2026, that allows us to pay inflation increases – also known as indexation – on PPF and FAS benefits relating to service before 6 April 1997. There are two groups of members who will be eligible for pre-97 increases:

Members whose scheme rules required the payment of indexation on benefits relating to pre-1997 service (members belonging to these schemes will, in most cases, start getting increases on all of their pre-97 PPF or FAS benefits) and;
Members whose schemes provided pre-1997 indexation only on post-1988 Guaranteed Minimum Pensions (members of these schemes will, in most cases, get increases on a proportion of their pre-97 PPF or FAS benefits).

The Act states that indexation will be capped at 2.5 per cent, per year and it will be paid going forward (prospectively).

You don’t need to contact us, we’ll contact eligible members directly. We intend to start writing out to all eligible members in the summer.

In the meantime, we’ve published a list of eligible schemes here: https://www.ppf.co.uk/our-members/pre97-schemes

We must apply increases in January each year – we have no discretion to pay increases out of this cycle.

For members whose schemes provided mandatory inflation increases on pre-97 pension benefits beyond just the post-88 Guaranteed Minimum Pensions (GMP), the intention is to bring the legislation into force on 31 December 2026. Members who are in payment at that time will receive their first pre-97 increase in January 2027.

For members who were only entitled to pre-97 increases on post-88 Guaranteed Minimum Pensions (GMP), we currently expect that the legislation will come into effect from 31 December 2027. Members who are in payment at that time will receive their first pre-97 increase in January 2028. However, the increase we apply in January 2028 is expected to make an allowance for the delay.

If you’re eligible for pre-97 indexation, then, in most cases, any eligible beneficiaries you have will also be entitled to increases on their pre-97 PPF compensation or FAS standard assistance.

The Act gives the Board of the PPF a discretion that allows it to alter the rate of pre-97 and post-97 indexation for PPF members.

The Board reviews its discretion powers annually – no decisions have yet been taken for next year.

We know though that:

We can’t use the new pre-97 discretion provision to cover the absence of past pre-97 increases.
The clear purpose of the power, when it's in force, is in relation to future inflation levels.
As a compensator, we need to approach very carefully any decision that could result in us paying more than original scheme benefits.

If you're thinking of retiring soon, visit our PPF member website or FAS member website to find out more.

We’ll share updates on this page, our PPF member website and our FAS member website so that you can stay fully informed of developments.

You don’t need to contact us. We intend to write out to all eligible members, starting in the summer.

General FAQs

The introduction of pre-97 indexation will benefit around 330,000 members overall;

around 180,000 PPF members and around 85,000 FAS members, who were members of schemes that provided pre-97 increases as a right.
around 39,000 PPF members and around 27,000 FAS members whose schemes provided pre-97 indexation only on post-88 Guaranteed Minimum Pensions (GMPs).

In September 2025, we published a letter to the Work and Pensions Select Committee (WPSC), that set out our latest estimates of the cost impacts of changes to pre-97 indexation.

We estimated that, as of 31 March 2025, the cost of introducing pre-97 indexation (capped at 2.5 per cent) for members of PPF and FAS schemes that provided for mandatory and statutory pre-97 indexation, on a prospective basis, would be £1.2bn for PPF and c.£300-600m for FAS.

We expect to be last man standing in the Defined Benefit (DB) universe and paying members into the next century – so we need to have confidence that we have the reserves to withstand a volatile global environment and evolution in the DB market over a very long period of time.

While this change will impact our funding position, and have broader impacts for wider scheme funding levels, we assess that we can enhance the inflation protection we give members without compromising the security of their or future members’ benefits.

We do not expect this will impact our levy plans.

We confirmed a zero levy for 2026/27 in February and published our levy rules and policy statement in March.