Your pension, your future

The local government pension scheme (LGPS) is a great way to save for your future and is an important part of your employment package.

Your retirement may be many years away but it’s important to make adequate financial plans now.

The LGPS gives you secure benefits with a future income that’s independent of share prices and stock market fluctuations.

Your employer pays in too – they meet the balance of the cost of providing your benefits in the LGPS.

Benefits of the Scheme

A secure pension

Your pension is calculated each Scheme year and is based on your pensionable pay. The Scheme year ends on 31 March. In the April following the end of each year, your pension is adjusted in line with changes in the cost of living.

Lump sum

When you take your pension, you have the option to exchange some of it for a lump sum. The lump sum will be paid tax-free in most cases. However, there is a limit on how much tax-free cash you can take from your pension. If you exceed that limit, you will have to pay tax at your marginal rate. 

Tax relief

Pension contributions are taken from your salary before tax is worked out. If you pay tax, as a member of the Scheme you will pay less tax on your earnings.

Peace of mind

Your family enjoys financial security, with immediate life cover and a pension for your loved ones in the event of your death in service. Your spouse, civil partner or eligible cohabiting partner and eligible children will benefit from a pension. If you ever become seriously ill and you have completed a full 2 years scheme membership, you could be eligible to receive immediate ill health benefits.

Flexibility to pay more or less

You can pay half your normal contributions in return for building up half of the normal pension. This is known as the 50/50 section of the Scheme.

You can increase your pension by paying more contributions.

Life cover

If you die as an active member of the LGPS, a death grant of three times your assumed pensionable pay is paid. Assumed pensionable pay is an estimate of your normal annual pensionable pay.

Freedom to choose when to take your pension

You do not need to have reached your Normal Pension Age in order to take your pension. Once you have completed two years scheme membership, you can choose to retire and take your pension at any time between age 55 and 75. Your Normal Pension Age is simply the age you can retire and take the pension you've built up in full without any actuarial reductions.

Redundancy and efficiency retirement

If you are made redundant or retired in the interests of business efficiency when you are 55 or over, you will receive immediate payment of the pension you've built up. Provided you have completed two years scheme membership your main LGPS pension would not be reduced for early payment. Any additional pension contributions you have bought would be reduced if you are under your Normal Pension Age when you retire.

Flexible retirement

Flexible retirement helps you ease into retirement. If you reduce your hours or move to a less senior position, you can take some or all the benefits you have already built up. Your benefits may be reduced for early payment.