Information on pre-97 indexation

What’s changing – pre-97 inflation increases

The Pension Schemes Act 2026 introduces a new law that will allow us to pay inflation increases, also known as indexation, on pension benefits built up before 6 April 1997.

Under that law we will be able to pay inflation increases of up to 2.5 per cent per year, on pre-97 compensation (for Pension Protection Fund (PPF) members) and standard assistance payments (for Financial Assistance Scheme (FAS) members), where members’ original schemes provided for mandatory pre-97 increases.

This change means that, for eligible PPF and FAS members, pre-97 benefits will broadly, be treated in a similar way to post-97 benefits when it comes to annual inflation increases.

From 7 July 2026, we’ll be contacting all members who will be eligible for pre-97 increases, to make them aware of the changes to their entitlement. You don’t need to contact us, we’ll contact you if you’re eligible.

Please don’t worry if you don’t hear from us straight away as it could take up to two months for all communications to be sent and received.

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 from FAS, for members receiving standard assistance.

We expect around 180,000 PPF members and around 85,000 FAS members will be part of this group.

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 built up 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 from FAS, for members receiving standard assistance.

We expect around 39,000 PPF members and around 27,000 FAS members will be part of this group.

View our list of eligible schemes

When will pre-97 increases be paid?

We must apply increases to members’ payments in January each year and aren’t allowed to pay them outside of this. We want to ensure we deliver these changes as fast as possible for the large number of members who will benefit. However, it’s 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 post-88 GMPs, the date from which the first increases are expected to be payable is 1 January 2027.

For members who were only entitled to pre-97 increases on post-88 GMP, the date from which the first increases are expected to be payable is 1 January 2028 and these increases will apply to a defined proportion of their pre-97 pension. The government hasn't yet confirmed what that proportion will be, 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 hasn’t yet retired, you can log into our PPF member website or FAS member website to 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

Every January we apply increases to any increasing PPF compensation or FAS assistance that’s in payment.

When we calculate the percentage increase, we look at the Consumer Price Index (CPI), which tracks the rate of inflation. We base the percentage increase on the CPI increase over the twelve months up to the previous May, subject to a maximum of 2.5 per cent, as set out in law.

Increases are pro-rata, which means, broadly speaking, if a member has retired part way through the year, the increase applied will reflect the proportion of the year payments were being received.

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 Board has always had a discretion that allows it to alter the rate of the post-97 indexation for PPF members. Because of the new law, our Board will now have a discretion that allows it to alter both the rate of pre-97and post-97, indexation for PPF members.

The Board reviews its discretion powers annually. It’s important to note 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 comes into effect, is in relation to future increases.

For increases payable this coming January (2027) the Board of the PPF has decided to leave the levels of indexation set in law unchanged for both pre-97 and post-97 increases. In reaching that decision the Board has taken into account inflation over the relevant period, which has been around 2.8 per cent — close to the 2.5 per cent increase already provided for in law. The Board has also considered a range of other factors, including its role as a compensator which means the Board must consider very carefully any decision that could result in payments exceeding original scheme benefits.

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

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 wrote to the Work and Pensions Select Committee (WPSC)setting 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 £1.4bn 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 enough funds 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 make this change without putting the security of current or future members’ benefits at risk.

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.