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You pay between 5.5% and 12.5% of the pensionable pay you receive. The rate you pay depends on which pay band you fall into.
The Contributions calculator shows your contribution rate based on your pensionable pay. The calculator shows the full rate of contributions in the main section or 50/50 section of the scheme.
You can opt to move to the 50/50 section of the scheme. You pay half your contributions and build up half your pension.
If you earn enough to pay tax, you receive tax relief on your pension contributions so you pay less tax.
Your employer pays towards the cost of your benefits in the scheme. Every 3 years an independent review (known as a triennial valuation) is undertaken. It calculates how much your employer should contribute. Your employer can tell you how much they pay.
The pay bands and rates are reviewed in line with each triennial valuation. It aims to maintain the average contribution from members at 6.5%.
From 1 April 2020 the pay bands and rates are:
|Actual pensionable pay for an employment||Main Section||50/50 Section|
|Up to £14,600||5.5%||2.75%|
|£14,601 - £22,800||5.8%||2.90%|
|£22,801 - £37,100||6.5%||3.25%|
|£37,101 - £46,900||6.8%||3.40%|
|£46,901 - £65,600||8.5%||4.25%|
|£65,601 - £93,000||9.9%||4.95%|
|£93,001 - £109,500||10.5%||5.25%|
|£109,501 - £164,200||11.4%||5.70%|
|More than £164,201||12.5%||6.25%|
For example, if you receive £16,000 a year you pay a contribution rate of 5.8% in the main section or 2.9% in the 50/50 Section. View further information in the 50/50 Section.
Bronwyn works full-time. She receives a whole-time annual salary of £24,000. She pays a contribution rate of 6.5%.
Denise works part-time. Her full-time annual salary is £24,000 and she works 25 hours a week. Her pensionable pay is £16,216.22 (£24,000 x 25 ÷ 37). She pays a contribution rate of 5.8%.
Darshan works part-time and term-time. His full-time annual salary is £24,000. He works 25 hours a week for 44 weeks a year. His pensionable pay is £13,721.41 (£24,000 x 25 ÷ 37 x 44 ÷ 52). He pays a contribution rate of 5.5%.
The Local Government Pension Scheme (LGPS) is a very secure pension scheme. It is defined and set out in law and the benefits are guaranteed with no investment risk.
If you leave before retirement you can transfer your pension rights to another scheme or leave your benefits in the LGPS. Benefits you leave in the scheme will continue to increase with the cost of living until they are payable at normal pension age.
Benefits of the LGPS are:
- Life cover
Should you die whilst a member of the scheme, 3 times your actual annual pensionable pay will be payable. This benefit is available from your first day of membership and no medical is required. View further information in Death in LGPS service.
- Tax relief
If you earn enough to pay tax, your pension contributions attract tax relief at the time they are deducted from your pay.
- No hidden fees or charges
You simply contribute a percentage of your pay.
- Your employer contributes
The scheme is provided by your employer who contributes towards the cost of providing your benefits. View further information in What does my employer pay?
- A secure pension
The pension you build up during your membership keeps pace with your pay rises and, after you retire, your pension keeps pace with cost of living increases.
- Tax-free cash
You have the option to exchange some of your pension for a tax-free lump sum on your retirement. View further information in Converting your LGPS pension to a lump sum.
- Protection for your loved ones
Your family is provided for in the event of your death with a pension for your spouse, civil partner or eligible cohabiting partner and eligible children (subject to certain criteria).
- Protection for you
If you become seriously ill, you could receive immediate ill-health benefits at any age. View further information in Ill health retirement.
- Options to pay reduced contributions
In times of financial hardship you can opt into the 50/50 section which allows you to pay half your contributions for half the benefits. View further information in The 50/50 section.
- Options to pay extra
You can boost your pension by paying extra contributions. You get tax relief on these contributions, too. View further information in Increasing benefits in the LGPS.
- Early retirement
The LGPS normal retirement age is your State pension age when full benefits are payable. You can choose to retire from age 55 but your benefits may be reduced to take account of being paid earlier. If your employer makes you redundant or retires you on the grounds of business efficiency after age 55, the benefits you have built up to the date you leave are payable immediately without reductions. View further information in Retirement in the LGPS.
- Flexible retirement
If you reduce your hours or move to a less senior position after age 55 you can, provided your employer agrees, take the benefits you have built up - helping you ease into retirement - although your benefits may be reduced for early payment. View further information in Flexible retirement.
Why start paying into a pension scheme now?
- To provide now, whilst you have an income, for later
- You pay smaller amounts but over a longer period in order to provide the pension you will need to continue the quality of life you want
- You will live on just the State pension if you do not provide an additional income to top this up.
- We are all living longer and could need to provide for ourselves for many years after retiring.
To join the Local Government Pension Scheme (LGPS) you must:
- be under age 75 (there is no lower age limit), and
- work for an employer that offers membership of the scheme.
It depends on your type of contract whether you automatically join the scheme, or you need to opt in. View further information about Who can join the LGPS?
Most people are automatically entered to the scheme by their employer. If you are not, contact them to check if you can join. If your employer confirms you can join, complete the Opt in form (PDF, 96.4 KB) (PDF, 96.4 KB) and return it to them.
Check your payslip to see if you are paying into the scheme. Your employer will inform us that you have joined the LGPS. We will create a pension record for you. We send an Annual Benefit Illustration (ABI) to you every year in late August. It details the pension benefits you have built up. View further information in Annual Benefit Illustration (ABI)
You join the main section of the scheme. You can opt in to the 50/50 section. You pay half your contributions and build up half your pension. View further information about the The 50/50 section.
You can join the LGPS and continue to pay into a personal or stakeholder pension. HMRC have rules about tax charges on pension savings. Most people will be under these pension savings limits and not incur tax charges. Find out further information about these limits in Tax controls and pensions.
Opting out of the scheme
You can opt out of the scheme at any time. View further information about Opting out. You can opt back in at any time.
Rejoining the scheme
If you left and rejoin the LGPS, you may have a deferred benefit. This is usually aggregated with your new pension account. If you opted out after 1 April 2015 you are not permitted to do this. View further information about Rejoining the LGPS.
Transferring in previous pension
You may be able to transfer in previous pension rights. You have 12 months from joining the scheme to request this. View further information about Transferring in pension rights.
Taking your pension
You can receive your full LGPS benefits at your normal pension age (NPA). For most members your NPA is your State Pension Age (SPA), minimum age 65. You can take your pension from age 55 but it may be reduced for being paid earlier. You can take your pension after your NPA and it is increased for being paid later. View further information about Retirement and taking your pension.
Automatic enrolment is a Government initiative. Your employer must enrol employees, that meet certain criteria, into a pension scheme. You can opt out. Your employer must re-enrol their employees every 3 years but you can opt out again. View further information about Automatic enrolment and the LGPS.
Your employer pays into the scheme. Every 3 years a valuation of the Fund is undertaken by an actuary. It calculates how much your employer must contribute to the scheme. View further information in What does my employer pay?