The federal government has notified a 7 percent increase in pensions for retired civil servants and armed forces personnel, effective from July 1, 2026, providing a measure of relief to pensioners grappling with the rising cost of living.
The increase, approved through an Office Memorandum issued by the Ministry of Finance, applies to all civil pensioners of the federal government, including civilians paid from Defence Estimates, as well as retired personnel of the armed forces and civil armed forces.
According to the notification, the enhanced pension will also be admissible to government employees who retire on or after July 1, 2026, ensuring that future retirees are not left out of the upward revision.
The finance ministry has clarified that the increase extends to family pensions granted under the Pension-cum-Gratuity Scheme, 1954, and the Liberalised Pension Rules, 1977, along with their subsequent amendments. Pensions sanctioned under the Central Civil Services (Extraordinary Pension) Rules and the Compassionate Allowance under CSR-353 will also qualify for the raise.
In cases where the gross pension sanctioned by the federal government is shared with another government, in line with the rules set out in Part IV of Appendix III to the Accounts Code, Volume I, the 7 percent increase will be apportioned between the federal government and the other government on a proportionate basis.
However, the notification makes clear that the increase will not apply to the Special Additional Pension allowed in lieu of the pre-retirement Orderly Allowance and the monetised value of a driver or an orderly.
