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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.
View the Contributions calculator to show your contribution band based on your pensionable pay and the full rate of contributions payable in the main 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.
From 1 April 2018 the pay bands and rates are:
|Actual pensionable pay for an employment||Main Section||50/50 Section|
|Up to £14,100||5.50%||2.75%|
|£14,101 - £22,000||5.80%||2.90%|
|£22,001 - £35,700||6.50%||3.25%|
|£35,701 - £45,200||6.80%||3.40%|
|£45,201 - £63,100||8.50%||4.25%|
|£63,101 - £89,400||9.90%||4.95%|
|£89,401 - £105,200||10.50%||5.25%|
|£105,201 - £157,800||11.40%||5.70%|
|More than £157,801||12.50%||6.25%|
For example, someone who is paid £16,000 a year would pay a contribution rate of 5.8% in the Main Section and 2.9% if they opted to move into the 50/50 Section.
View further information in the 50/50 Section.
Bronwyn works full-time on a whole-time annual salary of £22,000. She pays a contribution rate of 6.5%.
Denise works part-time. Her whole-time annual salary is £22,000 and she works 25 hours a week. Therefore her pensionable pay is £14,864.86 (£22,000 x 25 ÷ 37) and she pays a contribution rate of 5.8%.
Darshan works part-time and term-time. His whole-time annual salary is £22,000 and he works 25.00 hours a week for 44 weeks a year. Therefore his pensionable pay is £12,577.96 (£22,000 x 25 ÷ 37 x 44 ÷ 52) and he pays a contribution rate of 5.5%.
Your employer pays towards the cost of providing your benefits in the scheme. Every 3 years an independent review is undertaken to calculate how much your employer should contribute to the scheme. Your employer can tell you how much they pay.
The pay bands and rates are reviewed in line with each triennial valuation to maintain the average contribution from members at 6.5%.
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.
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 husband, wife, 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, draw 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.
Who can join?
To join the Local Government Pension Scheme (LGPS) you need to:
- 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 are automatically entered into the Scheme or you need to opt in. View further information about Who can join the LGPS?
Can I join the LGPS if I am paying into a personal or stakeholder pension?
Yes, you can join the LGPS and you can continue to pay into a personal or stakeholder pension. HMRC have rules governing tax charges on pension savings but most people will be under these limits. Find out further information about these limits in Tax controls and pensions.
How do I join?
Most people are automatically entered into the Scheme. If you are not, contact your employer to check if you can join. If your employer confirms you can join then complete the Opt in form (PDF, 96.0 KB) and return it to them. You are entered in to the main section of the Scheme. There is a 50/50 section which you can opt in to. In the 50/50 section you pay in half your contributions and build up half your pension. View further information in The 50/50 section.
How do I know if I am in the Scheme?
Check your payslip to see if you are paying into the Scheme. Your employer will inform us that you have joined the LGPS and we will create a pension record for you. You will receive an Annual Benefit Illustration (ABI) from us in late August from the following year onwards.
What if I change my mind?
You can opt out of the Scheme at any time. View further information about Opting out. You can opt back in at any time.
I am rejoining the Scheme. What happens about my previous LGPS pension?
If you previously left and then rejoin the LGPS, your deferred pension rights will usually be 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.
Can I transfer in previous pension rights?
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.
When can I retire?
You can retire and 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. View further information about Retirement in the LGPS.
What is automatic enrolment?
Automatic enrolment is a Government initiative. Your employer must enrol all of their employees into a pension scheme if they meet certain criteria. 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.
Does my employer contribute to my pension?
Yes, your employer pays into the Scheme too. Every 3 years a valuation of the Fund is undertaken by an actuary to calculate how much your employer should contribute to the Scheme. View further information in What does my employer pay?