Your pension is made up of different parts that you build up over your working life. If you worked between 1978 and 1997, part of your pension could be something called Guaranteed Minimum Pension (GMP).
In the past, there were two types of state pensions: the main one, and an additional one called the State Earnings Related Pension Scheme (SERPS). Employers could choose to offer a pension that was as good as SERPS, called GMP, to save money on National Insurance Contributions.
If part of your pension is GMP, it will differ from the rest of your pension in 2 ways:
How it increases
The GMP part of your pension will increase differently depending on when you earned it:
- GMP earned before 6 April 1988 doesn't increase.
- GMP earned after 6 April 1988 increases based on the Consumer Price Index (CPI) or 3%, whichever is lower, each April.
Minimum Pension Amount
The Scheme must pay you a pension that is at least the same as the GMP when you reach 65 if you are a man, or 60 if you are a woman.
GMP is usually a small part of someone’s pension. In most cases, the MPS pension is more than the GMP.
If your MPS pension is lower than the GMP, the Scheme will increase your pension to make up the difference. The Scheme administrator has already contacted members who this applies to.
You find more details about GMP in the GMP factsheet.