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Statement on 2024 UK defined benefit pensions increase

Release date:
19 April 2024

The rising cost of living has created real challenges for many people – including bp retirees globally. In our largest UK defined benefit scheme, the BP Pension Scheme, which is part of the BP Pension Fund (BPPF), pensions are guaranteed to increase each year in-line with the retail price index (RPI) to a cap of 5%.  

This year, the Trustee requested that the Company consent to the payment of a discretionary increase of 2% for pensioners to whom the request applies. This would result in a total annual increase of 7% for those pensioners when added to the guaranteed increase under the Rules of 5% (based on December 2023 RPI of 5.2%). 

The Company has considered the Trustee's request carefully.  However, having done so, the Company has decided not to consent to this request. 

In determining its response, the Company took into account a wide range of factors, including increases to the current cost of living, the funding position of the BPPF and the economic impact for bp. The Company also considered the interests of its broader stakeholders, including other members of the BPPF, employees in the UK and members of the Company's pension arrangements outside of the UK.  

In this regard, it is notable that the 5% increase on pensions exceeds the salary increase awarded to UK employees and is only marginally less than the December 2023 RPI figure. Moreover, over the last ten years bp pensions have increased by more than the increase in the consumer price index (CPI), which is used by the government to calculate the cost of living. 

Please note that the Company previously made additional funds available to the bp Helios Fund to provide financial aid to those on the lowest incomes. Over 6,500 pensioners applied for the one-off £2,500 grant.  The deadline for applying for that scheme has now closed but we are working with the trustee of the bp Helios Fund to make further funding available in 2024 to support future initiatives.  

Background: Earlier this year, some of bp’s most senior leaders held an Information Session for members of the BP Pension Fund. The session included background on the BP Pension Fund and also covered why pensions didn’t increase in 2022 and 2023 by more than the annual 5% cap under the Scheme rules. Some of the factors discussed at that information session are also relevant to bp's decision not to award a discretionary increase in 2024. Further information on the Information Session can be found here.