How is the LGPS pension calculated?

From April 2014, the LGPS is a Career Average Revalued Earnings (CARE) scheme. Each year, 1/49th of your pensionable pay is added to your pension pot. This is revalued (increased) each year in line with CPI inflation. So if you earn £30,000 in a year, you build up £612.24 (1/49th) of annual pension for that year. Your total pension is the sum of all the annual amounts you've built up, each revalued for inflation. Any pension built up before April 2014 uses the older final salary method (1/60th or 1/80th of your final pay for each year of membership).

How much do I pay into the LGPS?

LGPS contributions are based on your actual pensionable pay and range from 5.5% to 12.5%. Most members pay between 5.5% and 8.5%. The rates for 2025/26 are: up to £17,600 = 5.5%, £17,601–£27,600 = 5.8%, £27,601–£44,900 = 6.5%, £44,901–£56,800 = 6.8%, £56,801–£79,700 = 8.5%, £79,701–£112,900 = 9.9%, £112,901–£133,100 = 10.5%, £133,101–£199,700 = 11.4%, over £199,700 = 12.5%. Your employer pays a separate contribution on top (typically 15–25%).

When can I take my LGPS pension?

The normal pension age (NPA) in the LGPS is linked to your State Pension age for pension built up from April 2014 (currently 66, rising to 67 from 2028). You can take your pension early from age 55 (rising to 57 from 2028) with a reduction for early payment. You can also take it later, with an increase. Some members with older service (pre-2014) may have a protected earlier retirement age, such as 60 or 65.

Can I take a lump sum from my LGPS pension?

Yes — you can exchange (commute) some of your annual pension for a tax-free lump sum when you retire. The exchange rate is £1 of annual pension for every £12 of lump sum. The maximum lump sum is 25% of the capital value of your benefits. For example, if your annual pension is £15,000, you might exchange £3,000 of pension for a £36,000 tax-free lump sum, leaving you with a £12,000/year pension. Pre-2008 LGPS service may carry an automatic lump sum as well.

LGPS (Local Government Pension Scheme) Guide

The Local Government Pension Scheme (LGPS) is one of the UK’s largest pension schemes with around 6.7 million members. If you work for a local council, school, university, police staff, fire authority, or other qualifying body, you’re likely in the LGPS.

Key Facts

Feature	Detail
Type of scheme	Defined benefit — Career Average (CARE) from 2014
Accrual rate	1/49th of pensionable pay each year
Employee contributions	5.5%–12.5% of pay
Employer contributions	Typically 15–25%
Normal pension age	State Pension age (for post-2014 service)
Early retirement	From age 55 (57 from 2028) — with reduction
Tax-free lump sum	Up to 25% of capital value
Death benefits	Lump sum + survivor pension included
Inflation protection	Pension increases with CPI annually

Who’s in the LGPS?

Employer type	Examples
Local authorities	Council staff, social workers, administrative staff
Schools	Teaching assistants, school office staff, caretakers (teachers have a separate scheme)
Universities	Non-academic staff (some academic staff are in USS instead)
Police (civilian staff)	Police staff, PCSOs (police officers have their own scheme)
Fire (civilian staff)	Non-operational fire service staff
Other public bodies	Housing associations, academy trusts, transport bodies

Note: Teachers, NHS staff, police officers, and firefighters have their own separate pension schemes.

Employee Contribution Rates (2025/26)

Actual pensionable pay band	Contribution rate
Up to £17,600	5.5%
£17,601–£27,600	5.8%
£27,601–£44,900	6.5%
£44,901–£56,800	6.8%
£56,801–£79,700	8.5%
£79,701–£112,900	9.9%
£112,901–£133,100	10.5%
£133,101–£199,700	11.4%
Over £199,700	12.5%

Your contributions get tax relief — so the real cost is lower than the percentage suggests.

What You Actually Pay (After Tax Relief)

Salary	Contribution rate	Monthly contribution	After 20% tax relief	Effective cost
£25,000	5.8%	£120.83	£96.67	4.6% of pay
£35,000	6.5%	£189.58	£151.67	5.2%
£50,000	6.8%	£283.33	£226.67 (mix of 20% and 40% relief)	~4.5%

How Your Pension Builds Up

From April 2014: Career Average (CARE)

Element	Detail
Each year you build up	1/49th of your pensionable pay
Revaluation	Each year’s pension is increased by CPI
Example	Earn £30,000 → build up £612.24 of annual pension

Example: 20 Years in LGPS

Year	Salary	Pension built up (1/49th)
Year 1	£28,000	£571.43
Year 5	£32,000	£653.06
Year 10	£37,000	£755.10
Year 15	£42,000	£857.14
Year 20	£48,000	£979.59
Total (before revaluation)		~£14,500/year
After CPI revaluation		~£17,000–£19,000/year (depending on inflation)

Before April 2014: Final Salary

Period	Calculation
April 2008–March 2014	1/60th × final pay × years of membership
Before April 2008	1/80th × final pay × years + automatic lump sum of 3/80ths × final pay × years

Taking Your LGPS Pension

Normal Pension Age

Service period	Normal pension age
Post-April 2014	State Pension age (currently 66, rising to 67 from 2028)
Pre-April 2014 (post-2008)	65
Pre-April 2008	65 (or 60 in some cases — check your benefit statement)

Early Retirement Reduction

If you retire before your normal pension age, your pension is reduced:

Years early	Approximate reduction
1 year	~4–5%
2 years	~8–10%
3 years	~12–14%
5 years	~19–23%
10 years	~36–42%

The exact reduction depends on your age and whether the pension is pre- or post-2014.

Late Retirement Increase

Years late	Approximate increase
1 year	~5–6%
2 years	~10–12%
3 years	~16–18%

Tax-Free Lump Sum

Detail	Information
Exchange rate	£1 of annual pension = £12 of tax-free lump sum
Maximum	25% of the capital value of your benefits
Pre-2008 automatic lump sum	Some members get a lump sum automatically for pre-2008 service

Example

Scenario	Amount
Annual pension at retirement	£15,000
Choose to exchange £3,000 of pension	Get £36,000 lump sum
Remaining annual pension	£12,000/year
Tax-free lump sum	£36,000

Death Benefits

Benefit	Detail
Death in service lump sum	3 × annual pensionable pay
Survivor pension (spouse/civil partner)	1/160th of pensionable pay × membership years (post-2014)
Eligible children’s pension	Provided for dependent children
Nomination form	Complete an Expression of Wish form for the lump sum
Cohabiting partner	May qualify — must meet specific criteria

50/50 Section

Feature	Full section	50/50 section
Your contributions	Full rate (5.5–12.5%)	Half rate
Pension built up	1/49th per year	1/98th per year
Death benefits	Full	Full (not halved)
Ill-health benefits	Full	Full
Purpose	Normal accrual	Reduces cost when money is tight

You can switch between full and 50/50 at any time.