David Brooks: This will reignite debate over those retirees who are receiving pensions from schemes that don’t increase benefits for service before April 1997
State pensions will rise by 4.8% next year while index-linked DB benefits will grow by as much as 3.8% following the release of September inflation figures today (22 October).
This morning, the Office for National Statistics revealed that inflation had held steady over the past month – noting the consumer prices index (CPI) rose by 3.8% in the 12 months to September 2025, unchanged from August.
September inflation figures are particularly important as they are the numbers used to help decide the state pension increase next April and also used to uprate defined benefit (DB) pension benefits.
Today's inflation print of 3.8% confirms the state pension triple lock uprating will be delivered by the inflation-busting 4.8% earnings growth figure.
It also means those with index-linked DB pensions will see their annual income uprated by 3.8%, depending on their cap (normally 2.5% or 5.0%) and scheme arrangements.
Broadstone head of policy David Brooks said: "Many of those with index-linked DB pensions will see their annual income uprated in line with this inflation figure, delivering another boost to their retirement finances."
But Brooks said the uprating in some DB benefits would "reignite" the debate on pre-1997 indexation – with organisations such as the Association of Member-nominated Trustees (AMNT) calling for the reform of "unfair" pre-1997 service indexation.
Brooks explained: "This will reignite debate on those retirees who are receiving pensions from schemes that don't increase benefits for service before April 1997. This will remain a controversial topic and while members are receiving benefits as set out by the scheme, it is easy to have sympathy for those impacted where this causes hardship."
Positive impact
XPS Group chief investment officer Simeon Willis said the latest inflation numbers were a "good sign".
He said: "The 12-month inflation print remaining flat on last month is a good sign that near term inflation may be on the turn. Longer term expectations which are driven by gilt supply and demand from long term investors, indicate that long-term inflation protection appears to be falling out of favour - another good sign.
"Defined benefit pension scheme funding will generally have been positively impacted by the recent fall in inflation expectations."
