Open consultation

Guaranteed Minimum Pensions Fixed Rate Revaluation

Published 3 September 2026

Applies to England, Scotland and Wales

About this consultation

This consultation seeks views on the proposed continuation of 3.25% per annum (pa) as the rate of revaluation applied to fixed rate revaluation of Guaranteed Minimum Pensions (GMPs) for early leavers. This rate, subject to consultation responses, would apply to contracted-out members who leave pensionable service in the period 6 April 2027 to 5 April 2032.

Who this consultation is aimed at

This consultation is mainly aimed at pension administrators and employers who sponsor formerly contracted-out defined benefit occupational pension schemes. However, the government also welcomes comments from pension industry professionals, pension schemes, trustees, pension scheme members and member representative organisations and any other interested parties.

Purpose of the consultation

The aim of this consultation is to draw interested parties’ attention to and seek views on the proposed rate of fixed rate revaluation for GMPs for early leavers. This rate will be effective from 6 April 2027.

Scope of consultation

This consultation applies to Great Britain (England, Scotland and Wales). Occupational pensions policy is a devolved matter for Northern Ireland.

Duration of the consultation

The consultation period begins on 3 September 2026 and runs until 29 October 2026. This represents an appropriate timespan due to the targeted nature of the questions being asked. Please ensure your response reaches us by that date as any replies received after that date may not be taken into account.

How to respond to this consultation

Please send your consultation responses to: 

quarryhouse.gmpfixedraterevaluationconsultation@dwp.gov.uk  

If you are unable to email and prefer to send your response by post, please address it to:  

Defined Benefit: Fixed Rate Revaluation team  
2nd Floor Caxton House 
Tothill Street 
London 
SW1H 9NA

Government response

We will publish the government response to the consultation on the GOV.UK. The report will summarise the responses and set out the government’s reasoning behind our final decision on the appropriate rate that should be applied.

How we consult

Consultation principles

This consultation is being conducted in line with the revised Cabinet Office consultation principles published in March 2018. These principles give clear guidance to government departments on conducting consultations.

Feedback on the consultation process

We value your feedback on how well we consult. If you have any comments about the consultation process (as opposed to comments about the issues which are the subject of the consultation), let us know. These could include if you feel that the consultation does not adhere to the values expressed in the consultation principles or that the process could be improved. 

You can send feedback by post:

DWP Consultation Coordinator 
2nd Floor Caxton House  
Tothill Street 
London  
SW1H 9NA 

You can also email feedback to the Department for Work and Pensions (DWP) Consultation Coordinator: caxtonhouse.legislation@dwp.gov.uk

Data Protection and Confidentiality

For this consultation, we will publish all responses except for those where the respondent indicates that they are an individual acting in a private capacity, such as a member of the public. All responses from organisations and individuals responding in a professional capacity will be published. We will remove email addresses and telephone numbers from these responses; but apart from this, we will publish them in full. 

For more information about what we do with personal data, you can read DWP’s Personal Information Charter.

Chapter 1: Review of Guaranteed Minimum Pension Fixed Rate Revaluation for early leavers

Between 6 April 1978 and 5 April 1997, employers sponsoring salary-related occupational pension schemes could ‘contract out’ their employees from the Additional State Pension through membership of the employer’s scheme, provided the scheme took responsibility for paying a Guaranteed Minimum Pension (GMP), from age 60 for a woman or 65 for a man. On reaching this age, members would generally have built up a GMP of a broadly similar amount to the Additional State Pension, to which they would otherwise have been entitled had they not contracted out.  

Where a member of a formerly contracted out pension scheme leaves the scheme before pensionable age (an ‘early leaver’), the scheme must revalue their GMP until it becomes payable at pensionable age. Where a scheme has chosen to revalue the GMPs of early leavers using the ‘fixed rate method’, the GMP is revalued each year by the same percentage. The percentage is provided for in legislation by the rate relevant to the time they left the scheme. 

The revaluation rate is reviewed every 5 years and a new rate needs to be applied for those who leave pensionable service on or after 6 April 2027. DWP has always undertaken this review having taken the advice of the Government Actuary’s Department (GAD) on the rate that should apply. GAD has prepared the report in the Annex.

Chapter 2: Proposed Rate of Revaluation for Guaranteed Minimum Pensions with a Fixed Rate Revaluation

DWP are proposing to continue to apply the current rate of 3.25% pa as the fixed rate of revaluation for GMPs for early leavers from 6 April 2027. 

In their report, GAD recommend a rate in the range between 3% pa and 3.5% pa, based on a short to medium term view on earnings assumptions being applied, given that most individuals leaving pensionable service between 6 April 2027 and 5 April 2032 (when the next review takes place) are typically only around 5 years from the age at which GMPs are payable.  

Given the shortened timescales, there is less uncertainty around the increases in earnings for the members in question compared to looking over the longer term. We agree with GAD’s analysis and suggest that it would be appropriate to take the middle point of their proposed rate range. 

The current fixed rate of revaluation for GMPs is 3.25% pa. Therefore, this rate will continue to be used for the increases members will see on their GMPs if these are uprated according to the fixed rate. Schemes which revalue GMPs based on the fixed rate will not see a change in their projected GMP costs.

Chapter 3: Consultation questions

1. Do you agree with the proposal to continue to apply a rate of 3.25% pa as the fixed rate of revaluation for GMPs for early leavers from 6 April 2027? 

2. Do you agree that DWP should continue to adopt a short to medium term view on inflation and real earnings growth?