Pensions (Increase) Act 1971

2 Future reviews and increases

(1) Subject to the provisions of this section, the Minister for the Civil Service, as soon as may be after 31st March in the year 1973 and every second year thereafter, shall review the rates of official pensions against any rise there may have been in the cost of living during the review period, that is to say, the two years ending with that date ; and if it is found that in the review period the cost of living has risen by four per cent, or more, then the Minister shall by order provide that the annual rate of an official pension may, if a qualifying condition is satisfied, be increased in accordance with the order in respect of any period beginning on or after 1st September next following the review period.

(2) Subject to subsection (3) below, the increases to be provided for by an order under this section shall be as follows:—

(a) for pensions beginning on or before the first day of the review period the increase shall be in the proportion (to the nearest one-tenth of one per cent.) in which the cost of living has risen during the review period; and

(b) for pensions beginning in the half year following that day or in any of the succeeding half years up to that ending with the day after the end of the review period, the increases shall be in the proportion (to the nearest one-tenth of one per cent.) in which the cost of living is found to have risen between the basis period for that half year and the end of the review period, if the cost of living in the basis period is taken as the mean of the monthly figures.

For purposes of paragraph (b) above, the basis period for any half year is the six months ending with the first month of the half year or, if the cost of living is lower in the half year than in those six months, is the half year itself.

(3) Where the rise referred to in subsection (2)(b) above is less for any half year than four per cent., there shall only be an increase for pensions beginning in that half year if there is one for pensions beginning in a later half year, and the increase (if there is one) shall be four per cent.; but where this subsection prevents there being an increase for pensions beginning in any half year, then the order made in respect of the next review period shall for those pensions authorise, instead of an increase calculated in accordance with subsection (2)(a) above, such increase as would result if that prevented by this subsection had been made and were followed by one calculated in accordance with subsection (2)(a) by reference to the rate as so increased.

(4) Where on any review under this section (including a review made by virtue of this subsection) it is not found that the cost of living has risen by four per cent, or more in the review period, then there shall be a further review in the next year for the same review period extended by twelve months ; and if on a review made by virtue of this subsection it is found that the cost of living has risen by four per cent, or more in the (extended) review period, the provisions of this section shall apply accordingly, and later reviews shall be made at intervals of two years thereafter until this subsection again applies.

(5) On any review under this section the cost of living shall be assessed by such means as the Minister thinks appropriate.

(6) The increases in the rate of a pension that may be provided for by an order under this section are to be calculated, except as otherwise stated in this Part of this Act, by reference to the basic rate of the pension as authorised to be increased by section 1 above or by any earlier order under this section ; but an order under this section may be made so as to incorporate the effect, in whole or in part, of section 1 above or of any earlier order under this section, and may repeal or amend any provision of that section or of any such order accordingly.

(7) An order under this section shall be made by statutory instrument, which shall be laid before Parliament after it is made.