ISLAMABAD – The federal government has approved a 7% increase in the baseline pension of all civil pensioners, civilian beneficiaries receiving pensions from defence estimates, retired personnel of the armed forces, and pensioners of the civil armed forces.
According to an Office Memorandum issued by the Ministry of Finance, the increase will take effect from July 1, 2026. It will apply to all pensioners whose baseline pension has been determined in accordance with the ministry’s notifications issued on January 1, 2025, July 7, 2025, and August 5, 2025.
The memorandum states that the 7% increase will also be applicable to government employees retiring on or after July 1, 2026.
It further clarified that the 15% pension increase granted on July 1, 2022, and the 7% increase approved on July 7, 2025, will continue to apply to government employees retiring on or after July 1, 2026.
The notification said the latest increase will also be admissible on family pensions, pensions sanctioned under the Pension-cum-Gratuity Scheme 1954, the Liberalised Pension Rules 1977, the Central Civil Services (Extraordinary Pension) Rules, and compassionate allowance.
The Ministry of Finance added that where pension payments are shared between the federal government and another government under existing rules, the financial burden of the increase will be divided between them in the prescribed ratio.
However, the ministry clarified that the 7% increase will not apply to the special additional pension granted in lieu of the pre-retirement orderly allowance or to the monetised value of a driver or orderly.
