When can I take my deferred pension?

Couple discussing pension arrangements with an advisor

If you left the LGPS on or after 1 April 1998

Your deferred pension benefits are normally payable in full at your Normal Pension Age in the LGPS. From 1 April 2014 your Normal Pension Age is linked to your  State Pension Age (but with a minimum of age 65). The Normal Pension Age for benefits built up before 1 April 2014 is age 65 (in almost all cases). You do not have to take your deferred pension benefit at your Normal Pension Age, you can take it at any time between the ages of 55 and 75; it can also be paid from any age if you suffer permanent ill health

There are two ways they can be paid earlier and these are:

  • early payment of deferred benefits at your request, or
  • early payment of deferred benefits due to permanent ill-health.

Requesting early payment of your deferred benefits

You can choose to take early payment of your deferred benefits from age 55. You do not need your former employer's consent to take your pension before your Normal Pension Age.

If you choose to take your deferred benefits before your Normal Pension Age your benefits will normally be reduced to take account of their early payment and the fact that your pension will be paid for longer. How much your deferred benefits are reduced by depends on how early you take them. The reduction is calculated in accordance with guidance issued by the Government which can change from time to time. The reduction is based on the length of time (in years and days) that you retire early i.e. the period between the date your benefits are paid and your Normal Pension Age. The reduction factor table is shown below.

If you built up pension in the LGPS before 1 April 2014 then protections are in place for the Normal Pension Age that applies to those benefits (even if you continued to pay into the LGPS after 1 April 2014). The protected Normal Pension Age before 1 April 2014 is age 65 (for almost all members). This means if you left the LGPS before 1 April 2014 your deferred benefits will payable in full at age 65.

In addition, if you were a member of the LGPS at anytime between 1 April 1998 and 30 September 2006, some or all of your benefits could be paid in full earlier than age 65 if you are a rule of 85 protected member.

Please note that you cannot take your benefits built up to 31 March 2014 separately from the benefits you build up from 1 April 2014. All your benefits must be taken at the same time.

Your former employer can agree to waive any reduction. This is a discretion and you can ask your employer what their policy on this is.

If you left the LGPS before 1 April 1998

Your deferred pension benefits are normally payable in full at your Normal Retirement Date (NRD). Your Normal Retirement Date is different to the Normal Pension Age for members who left on or after 1 April 1998. Your Normal Retirement Date is:

  • age 60, if by that age you would have built up 25 years membership if you had remained in the scheme until then, or
  • the date you would have achieved 25 years membership if you had remained in the scheme, if that date falls between your 60th and 65th birthday, or
  • age 65 if, by that age, you would not have had built up 25 years membership if you had remained in the scheme until then.

You do not have an option to defer payment of your benefits beyond your Normal Retirment Date i.e. you have to take payment of your benefits at that date if they are not already in payment. You also have the option of taking your deferred pension benefit early at age 55 and it can be paid from any age if you suffer permanent ill health.

Early payment of deferred benefits at your request

You can choose to take early payment of your deferred benefits at age 55. You do not need your former employer's consent to take your benefit at age 55, but if you want to take payment from this date you must make an election to so within 3 months of your 55th birthday. If you do not take early payment of your deferred benefit at age 55 you will have to wait until your Normal Retirment Date to take them - you cannot choose to take payment of your benefits at any other date unless your employer agrees to early payment on compassionate grounds or the benefits are paid early on the grounds of permanent ill health.

If you choose to take your deferred benefits at age 55 your benefits will normally be reduced to take account of their early payment and the fact that your pension will be paid for longer. The reduction is calculated in accordance with guidance issued by the Government which can change from time to time. The reduction is based on the length of time (in years and days) that you retire early i.e. the period between the date your benefits are paid and your Normal Retirement Date.

Reductions if you choose to retire before your Normal Pension Age LumP SUM REDUCTION
Number of years paid early Men Women Both
0 0.0% 0.0% 0.0%
1 5.6% 5.2% 2.9%
2 10.8% 10.1% 5.7%
3 15.5% 14.6% 8.5%
4 20.0% 18.8% 11.2%
5 24.0% 22.7% 13.7%
6 27.8% 26.4% 16.3%
7 31.4% 29.8% 18.7%
8 34.7% 33.0% 21.1%
9 37.7% 36.1% 23.4%
10 40.6% 38.9% 25.6%
11 44.2% 42.2% N/A
12 47.6% 45.5% N/A
13 50.9% 48.6% N/A

Payment of deferred benefits due to permanent ill health

The second method of obtaining early payment of your deferred benefits is on the grounds of permanent ill health. You can apply for payment of your deferred benefits at any age, without reduction if, because of your health, you would be permanently incapable of the job you were working in when you left the LGPS; if you left the LGPS after 31 March 2008 there is a further requirement that you are unlikely to be capable of undertaking any gainful employment within 3 years of applying for the benefit or by your Normal Pension Age, whichever is the earlier. In this context gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

If you think payment of deferred benefits on the grounds of ill health could apply to you please contact your old employer.

Payment of deferred benefits at or after NPA

If you do not take early payment of deferred benefits under either of the above two methods the deferred benefits will be paid from your Normal Pension Age unless you opt to delay payment beyond that age.

If you take your deferred benefits after your Normal Pension Age your pension will be increased by 0.010% for each day payment of your pension is delayed beyond your Normal Pension Age. In addition a 0.001% increase will be applied to any automatic lump sum you receive in respect of any pre 1 April 2008 membership for each day that lump sum is drawn later than age 65.

Deferred benefits must be paid before age 75.

However, if your pension is not in payment at age 60 (women) / 65 (men), the Guaranteed Minimum Pension (GMP) element (if any) of your pension may have to be paid from that date - this will depend on when you left the scheme and if you are still in employment.

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