Your pension finances

Once you have completed your retirement application, we will process your benefits within 10 working days of us receiving all the required information from you and your employer. You’ll receive any lump sum shortly after and your first pension payment is usually paid at the end of the month.

Please note, this could be the following month, depending on when we receive your completed forms. We’ll let you know when your pensions payments will start.

The value of the pension you receive (once you’ve retired) is adjusted annually in line with the consumer price index (CPI). This is the official measure of inflation, based on hundreds of different goods and services. So if inflation goes up, so does your pension.

For more information about pension increases, click here

Your pension benefits are increased in line with inflation, which means that when inflation goes up, so does your pension.

Your pension is adjusted each April (the start of the financial year) to make sure it is in line with the consumer price index (CPI).

Your first pension payment is usually paid at the end of the month of your retirement date (the date you’ve agreed with your employer to retire).

This date can sometimes affect when you receive your first payment. If the date falls in the last week of the current month, it’s likely you’ll receive it at the end of the following month.

If you contribute to other pensions, please let us know so we can make sure the benefits you receive don’t go over the HMRC limits. HMRC limit the value of the total tax-free lump sums you can receive from all pension schemes at £268,275. So, you will need to provide evidence of any tax-free lump sum taken from your first pension before you claim a second tax free lump sum.

Depending on your situation, you may receive a tax-free lump sum when you retire, but your annual pension is taxed like any other kind of income you earn. HMRC limit the amount of tax-free lump sum at £268,275 for most members for all schemes. If you are affected, we will provide you with full details when you retire.

If we have received your P45 from your employer, we will apply the same tax code to your pension on a ‘month one’ basis. We will then notify HMRC as soon as the pension goes into payment and they will notify us of the correct tax code to use.

A P60 is an annual statement that you receive at the end of the tax year (5 April). It shows the tax you’ve paid on your salary throughout the tax year (6 April to 5 April of the following year).

If you’re retired and taking your pension, you’ll also receive a P60 for the benefits you have received and paid tax on during that period.

If you’re receiving your pension from LPPA, you can access your P60 by downloading it via your online account.

The LGPS offers an ‘in-house’ AVC. If you have an AVC, contributions will be taken from your salary and you will receive an annual statement from your AVC provider.

If you have an AVC and you leave the LGPS before retirement, your contributions will stop, meaning you’ll also stop contributing to your AVC. But its value will continue to be invested with your provider until it is paid to you when you retire.

Alternatively, you can transfer your AVC to another provider or take it at the same time as your LGPS pension benefits.

To learn more about AVCs, visit our Additional voluntary contributions (AVCs) page

To take out an APC, you need to fill in an APC form (including stating the additional contributions you want to pay). To learn more about APCs, click here.

You’ll need to complete an APC form, which you can download here. But it’s important to make sure you get financial advice from a professional before you make any decisions.

When you reach retirement age you will be sent a quote of your pension benefits, which includes the value of any APCs you have bought. When and how you decide to retire will affect this value. For example, if you retire at normal pension age, your APCs will be paid in full, but if you retire earlier, they may be reduced.

If you have an APC you contribute to each month and you leave the LGPS, your pension will be credited with the total amount of additional pension you have paid for up to that point (Note – the same applies if you choose to stop paying your APC before the end of your agreed payment period).

If you have an APC and you have to retire because of ill health, you will be credited with the full amount of pension you agreed to buy.

To learn more about APCs, visit our Additional pension contributions (APCs) page

This allows you to reduce your benefits in the Local Government Pension Scheme by paying half the contributions of your pension for half the benefits.

Half the amount of pension contributions are taken each month in comparison to the main scheme. Your pension account then builds up at half the rate of the main scheme. But you are still entitled to full death benefits and ill health benefits.

You’ll be charged tax on those pension savings that exceed your annual allowance. If you’re worried you’re close to exceeding your annual allowance, it’s a good idea to speak to a financial adviser.

Please be aware that the 2023 Spring Budget has included plans to increase the annual allowance from £40,000 to £60,000 from 6 April 2023.

Learn more about your annual allowance

We’ll write to you to let you know and tell you what you need to do.

Learn more about your annual allowance

McCloud (also known as Remedy) is an age discrimination ruling (McCloud was the name of the judge) that has had an impact on members of certain workplace pension schemes.

To find out more about Remedy, click here if you’re with the Police pension scheme, and click here if you’re with the Firefighters’ pension scheme.

We don’t yet have the details of how McCloud might affect members’ pensions. What we can say is that Local Government Pension Scheme (LGPS) members, who retired before 1 April 2014, won’t be affected. We will also be carrying out checks on Police and Fire scheme members once we have more details (expected in or after October 2023).

We will update our website with any key news updates, so make sure you check it regularly. We’ll also be contacting all Police and Firefighter members, who retired after 1 April 2015, once we know more (expected in or after October 2023).