ISLAMABAD: The federal government has approved a 7 percent increase in the baseline pension of all civilian pensioners, civilians receiving pensions from defence estimates, retired armed forces personnel and civil armed forces pensioners.
According to an office memorandum issued by the Ministry of Finance, the increase will take effect from July 1, 2026, and will apply to pensioners whose baseline pension was determined under the ministry’s relevant instructions issued on January 1, July 7, and August 5, 2025.
As per the announcement, a 7 percent hike is going to be applicable for retired government employees effective July 1, 2026.
It was also mentioned that the 15 percent pension hike on July 1, 2022, and the 7 percent hike approved on July 7, 2025, shall continue to be applicable for employees retiring on or after July 1, 2026.
The latest hike shall also be applicable to family pension, pension under Pension-cum-Gratuity Scheme 1954, Liberalized Pension Rules 1977, Central Civil Services (Extraordinary Pension) Rules, and approved compassionate allowances.
The ministry added that if a pension is being jointly paid by the federal government and another government under applicable rules, the increased pension amount will also be shared between the two governments according to the agreed ratio.
However, the Ministry of Finance clarified that the newly approved 7 percent increase will not apply to special additional pension granted in lieu of pre-retirement orderly allowance or the monetized value of driver or orderly facilities.
