FAQs on Pre-97 indexation

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

1. 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 benefits) and;
2. 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 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 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 entitled to pre-97 increases on post-88 GMP only, 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.  

Every January we apply increases to any increasing compensation or standard 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.  

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-97 and 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.  

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We’ll share updates on this page ppf.co.uk 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.