Local Government Pension FAQs

A death grant isn’t payable if you’re aged 75 or over when you die, or:

• You have been receiving your pension for five years or more (if you left the Local Government Pension Scheme between 1 April 1998 and 1 March 2008).

  Or

• You have been receiving your pension for ten years or more (if you left the scheme after 31 March 2008).

Please note, a death grant is unlikely to be payable if you have been receiving your pension and left the scheme before 1 April 1998.

A death grant is likely to be payable if you’re under aged 75 when you die, and:

• You have been receiving your pension for less than five years (if you left the Local Government Pension Scheme between 1 April 1998 and 1 March 2008).

Or

• You have been receiving your pension for less than ten years (if you left the scheme after 31 March 2008).

Note, your death grant may be affected if you have already taken your lump sum.

While your pension scheme can ultimately decide who your death grant goes to, it will always be guided by who you nominate as a beneficiary.

A death grant is a financial lump sum that is payable in the event of your death when you have a local government pension. It acts as a kind of life insurance for your loved ones when you die.

If you want to add value to your Local Government, Police or Firefighters’ pension, you have the option of taking out additional pension contributions (APCs). This will help you to increase the pension you’ll receive when you retire.

You can buy APCs either by making regular payments from your salary, or by paying a lump sum. The additional contributions increase the value of your pension, regardless of how the pension fund performs.

Please note, you can’t buy APCs if you’re in the 50/50 section of the Local Government Pension Scheme.

Yes, you can opt out of the Scheme and rejoin at a later date. However, it’s important to mention that you will lose out on the contributions both you and your employer would have put in during the period you left the Scheme. This may reduce the pension benefits you’re entitled to when you reach retirement age. Also, if you opt out and later rejoin, a new pension will be created for you and you won’t be able to combine this pension with your previous one.

If you want to take a break from paying into your pension to help with your finances, rather than opting out, it’s worth considering the 50/50 option. This is where you contribute half of the amount you would normally pay into your pension each month. For more information about this, please visit: 50/50 Option

Yes, you can. However, you may want to consider the 50/50 option. This is where you pay half your contributions to receive half of the pension benefits. For more information, please visit: 50/50 Option

If you do want to opt out from the Pension Scheme, you can at any time as long as you do so more than 12 months before your normal retirement date. But if you wish to receive a refund of your contributions (minus 20% tax), you must opt out within two years of joining the Scheme. If you opt out after more than two years, you become entitled to deferred pension benefits. This will attract a cost of living increase each year until you reach your normal retirement age. If you change employment, you may also be able to transfer your pension benefits to another pension scheme.

There are many reasons to join the Scheme, including providing you with a guaranteed pension based on your salary and length of service. You are not subject to the ups and downs of the stock market, and for every £1 you put in, your employer puts in approximately £2. Membership also comes with a range of benefits, such as protection for your loved ones. To find out more about the benefits of the Local Government Pension Scheme, please visit our web page: Local Government Pension Scheme

This is something to consider if you wanted to ease your way into retirement gradually. Rather than leaving your job to go straight into retirement, it allows you to take some of your pension benefits, so you can work fewer hours or days a week, or even take a less senior role.

You can only take flexible retirement if you:

• Are over age 55.
• Have met the two-year vesting period (See our FAQ about this).
• Have agreed this with your employer.

Please note, the pension benefits you’ll receive may be reduced if you take flexible retirement before your normal pension age.

If you leave your current employer to move to another job, for instance, or because you’re made redundant, you have two options to consider when deciding what happens to your pension. You can either keep your pension with your current employer, so that you no longer make contributions to it, which makes it a deferred pension. Or you can transfer it to your new employer, so you make contributions to it through their pension scheme instead.

It’s important to bear in mind, though, another employer’s pension scheme might not have the level of security that the Local Government Pension Scheme offers. So, if you’re considering transferring your pension, it’s wise to think carefully before making a decision. For more information about this, please visit: https://www.lgpsmember.org/thinking-leaving.php

If you decide to move to another employer, such as a local authority who offers the Local Government Pension Scheme (LGPS), then you can transfer your pension into that scheme. Alternatively, you can leave it with your current employer, which makes it what is called a deferred pension. If you do this, you become a Deferred Member, meaning you no longer make contributions to that pension. This would also apply if you changed jobs to work for an employer who does not offer the LGPS. As a Deferred Member you will receive the pension once it becomes payable, which can be claimed from aged 55 to 75.

If you have been in the Local Government Pension Scheme for two years or more and you leave your job, you become entitled to deferred pension benefits, which can be claimed from aged 55 to 75. If you were in the Scheme for less than two years, you may receive a refund of contributions, minus 20% tax. Alternatively, you may transfer your pension benefits to another pension scheme as long as you do so more than 12 months before your normal retirement age. For more information, please visit: https://www.lgpsmember.org/tol/thinking-leaving-before.php

There are certain times when a member may take their pension before their normal retirement age (typically 55). This may be due to redundancy or ill health, which leaves them unable to work.

When this happens, there may be a shortfall in the funding that’s needed to cover the cost of the member’s pension benefits. This is known as a pension strain cost.

Usually, the employer will pay these costs (for example, in the case of redundancy).

This is your opportunity to say who you would like to receive a tax-free lump sum (also known as a death grant) if you die.

Although your pension fund ultimately decides who receives your death grant, your nomination can help to make sure the money is distributed in an appropriate way. It can also make sorting out your finances far less stressful for friends and family.

A nominated beneficiary is the person, or people, you choose to receive your lump sum (also known as your death grant) after you die.

Log into My Pension Online

Select ‘Nominations’

Select ‘Death Grant Nomination Details’

Add nominee details and the % you wish for them to receive and press submit

This change will be reflected on My Pension Online within 24 hours.

Alternatively, you can download, complete and submit a Death Grant Nomination form from here.

The pension benefits you receive will be taxed, depending on any other income you have coming in at the time. You won’t get a tax-free amount each month. However, you do have the option to swap part of your pension for a tax-free lump sum.

You can retire and take your pension from aged 55 up until you’re 75. However, if you’re employed in local government, you would need to leave this post to take the pension unless you left your employment on flexible retirement grounds. For more information about this, please visit: https://www.lgpsmember.org/tol/thinking-leaving-when.php

If you are still contributing to the Local Government Pension Scheme through your wages, which means you’re an Active Member, you can find more information about when you can take your pension by visiting: Active Members

If you are no longer contributing to the Local Government Scheme, but have not yet started receiving your pension benefits, meaning you’re a Deferred Member, you can find more information about when you can take your pension by visiting: Deferred Member

• If you stopped making contributions to the Scheme before 1 April 2008, and if at the time of your passing you are under the age of 75, the payment will be five times your annual pension, minus the pension you’ve already been paid since you retirement.
• If you stopped making contributions to the Scheme between 1 April 2008 and 1 April 2014, and if at the time of your passing are under the age of 75, the payment will be 10 times your annual pension, minus the pension you’ve already been paid since your retirement.
• An ongoing pension is provided for your spouse, registered civil partner or, subject to certain qualifying conditions, eligible cohabiting partner and eligible children. For more information, please visit this page

If you joined the Local Government Pension Scheme before 1 April 2014, you will have been a member of a Final Salary scheme until this date. This means that your retirement income (relating to this period) is calculated using your final year’s salary (or your highest annual salary within the last three years of employment).

For every year you were a member before 2008, 1/80th of your final salary will paid out as a separate part of your pension to make up your annual retirement income. And for every year between 2008 and 2014, 1/60th of your final salary will be added. If you were a part-time employee, this will be reduced according to the hours you worked.

Along with any CARE pension you build up, these figures will help to make up your annual retirement income. For more information, visit the Local Government Pension Scheme web page, How your pension is worked out.

If you joined the Local Government Pension Scheme after 1 April 2014, you will have a Career Average Revalued Earnings pension (CARE pension for short). This is based on your average earnings (pensionable pay) over the course of your career – including salary, bonuses, overtime, maternity/paternity pay.

Each year, 1/49th of your pensionable pay is put into your pension account to make up your annual retirement income. At the end of the year, your account is adjusted to reflect inflation. This happens every year and as your pension account grows, so too does your annual retirement income.

Yes, you can pay extra to increase your pension benefits in the Local Government Pension Scheme in two different ways. You can either pay additional contributions to buy an increased pension, which is known as Additional Pension Contributions (APCs). Or you can make payments to an Additional Voluntary Contribution (AVC) scheme to build up a pot of money, which is then used to provide additional benefits to your Scheme benefits.

The Scheme has arrangements with AVC providers, such as insurance companies and building societies, in which you can invest money. For more information on APCs and AVCs, please visit: https://www.lgpsmember.org/arm/already-member-extra.php

You can view the value of your pension benefits anytime through our Member’s online service, My Pension Online. As the administrator of pensions in the Scheme, the Local Pensions Partnership Administration (LPPA) provide the service. By registering, you can check what your pension benefits currently look like. You can also use the facility’s online calculator to see the size of the pension income you could be entitled to when you retire if you’re currently making contributions to the Scheme. For more information about My Pension Online, please visit: My Pension Online

The Local Government Pension Scheme is revalued in April each year to keep up with living costs and allow for changes to inflation. Negative inflation, which means inflation has dropped below 0%, occurs when prices fall in an economy. If this happens, it can affect the pensions of Members who are currently contributing to a pension scheme through their wages (Active Members). To allow for the fall in inflation, they would see their pension benefits reduced in April the following year.

Those Members who have stopped contributing to the Pension Scheme, however, won’t be affected. This includes Deferred Members, who are no longer making contributions but have not yet started receiving their pension benefits, and Pension Members, who have started receiving their monthly pension through the Scheme.

This is basically the individual account in which all your pension contributions are kept. The contributions you make to your pension, which are taken from your monthly earnings, are put into this account. Your pension is worked out from 1 April each year and the value is added to your pension account. The account is also revalued each April to allow for inflation and to keep up with the cost of living. Any pension benefits built up before April 2014 are Final Pay benefits and will therefore be calculated on your Final Pay when you leave the scheme. The resulting pension will then be added to the value of your pension account.

If you want to add value to your Local Government, Police or Firefighters’ pension, you have the option of taking out additional pension contributions (APCs). This will help you to increase the pension you’ll receive when you retire.

You can buy APCs either by making regular payments from your salary, or by paying a lump sum. The additional contributions increase the value of your pension, regardless of how the pension fund performs.

Please note, you can’t buy APCs if you’re in the 50/50 section of the Local Government Pension Scheme.

Your contributions make up one-third of the money that’s paid into your pension, with your employer paying in the rest. How much you receive in pension benefits depends on how long you live in your retirement. Generally, though, you should receive a full return on your contributions within a three-year period once you reach retirement age. We will also pay the shortfall of 10 years of your annual pension to your estate, such as for your loved ones, should you pass away shortly after retiring, depending on when you stopped paying contributions into the scheme.

Yes, it will. Your pension is based on your salary and length of service, so the amount of contributions you pay into the Local Government Pension Scheme depends on the amount you earn. This means if your pay increases, your pension contributions will increase too. In turn, this will increase the pension benefits you receive when you reach retirement age. You also have the option to increase the level of contributions you pay, such as with an additional voluntary contribution scheme. For more information about this, please visit: https://www.lgpsmember.org/arm/already-member-extra.php

Yes, but only if your earnings change. The amount of contributions you pay into your pension in the Local Government Pension Scheme depends on the amount you earn. You pay a contribution rate of between 5.5% to 12.5%, depending on your wage. Contribution rates are reviewed periodically and can change over time. You also have the option to increase the level of contributions you pay, such as with an additional voluntary contribution scheme. For more information about contribution rates, please visit: https://www.lgpsmember.org/toj/thinking-joining-how.php

Yes, it is. This is because the money that’s paid into your pension is invested into a fund that is protected by the Government, which is not subject to stock market fluctuations.

• An amount which is three times your assumed pensionable pay – (normally an average of your last three months’ pay) – will be paid in accordance with your nominated beneficiary or beneficiaries request.
• An ongoing pension is provided for your spouse, registered civil partner or, subject to certain qualifying conditions, eligible cohabiting partner and eligible children. For more information, please visit this page

This is the length of time you must be contributing to an LGPS pension, before you’re entitled to those benefits. It’s a minimum of two years, but can be less in certain circumstances. For example, if you hold deferred pension benefits in the LGPS, or are receiving another LGPS pension. For more information, visit the Vesting Period page on the LGPS website.

Your Annual Benefit Statement, otherwise known as your ABS, shows you the pension benefits you’ve built up to date. It also shows the amount that’s payable to your nominated beneficiary or beneficiaries, which is called your death grant, as well as the current amount in your survivors’ pension. This is the ongoing pension that will be provided for your spouse, registered civil partner or, subject to certain qualifying conditions, eligible cohabiting partner and eligible children. For more information about the ABS, please visit: Annual Benefit Statement

The Local Government Pension Scheme is a defined benefit pension scheme, which means your pension is based on your salary and how long you’ve paid in. This means your pension is not linked to the stock market performance, so both your contributions and your pension, whether in payment or not, will not be unaffected. However, if you have other concerns about the impact of Covid-19 on your pension or if you make additional voluntary contributions (AVCs), please visit: https://www.lgpsmember.org/news/story/covid_19_member_qanda.php

• An amount, which is three times the deferred annual pension that the Member was due to receive, will be paid in accordance with your nominated beneficiary or beneficiaries request. Or if you stopped contributing on or after 1 April 2008, and have not yet received payment of the pension benefits, this will be five times the deferred annual pension that the Member was due to receive.
• An ongoing pension is provided for your spouse, registered civil partner or, subject to certain qualifying conditions, eligible cohabiting partner and eligible children. For more information, please visit this page