Whether the Local Government Pension Scheme is any good starts here: each year adds 1/49th of pay, and employers meet roughly three quarters of costs on average.

It is one of the largest pension schemes in the UK: 6.9 million members, over 18,000 employers and 86 local funds across England and Wales. How it serves you turns on your pay, your years in the scheme and what else you have put by; an FCA-authorised adviser can talk all three over on a free call if you complete this page's form.

How good is the Local Government Pension Scheme's promise, and who pays for it?

The scheme's member website for England and Wales calls the LGPS "a defined benefit pension scheme which means your pension is based on your salary and how long you pay into the Scheme", and says "Your pension is not affected by how well investments perform." The money behind it is invested by the local funds, and the member site puts the market value of the LGPS at £402 billion in March 2025.

Those investments shape the employer's bill rather than your pension. Every three years an independent actuary works out each employer's share after taking investment returns into account, so it varies, though "On average, employers pay roughly three quarters of the Scheme's costs, with employees paying a quarter." Employer figures are on the employer contributions page; the wider picture is in the LGPS explained.

1/49th of pay a year, and the band you pay at

Since 1 April 2014 the pension you earn is career average rather than final salary. Regulation 23 of the Local Government Pension Scheme Regulations 2013 puts the earned pension for a scheme year at "1/49th of the member's pensionable pay received in that year". It goes into a pension account whose balance is "adjusted in the following April in line with the cost of living". The April rise is covered on the pension increase page, and a fuller worked calculation at how an LGPS pension is calculated.

For 2026/27 the member rate runs from 5.5% to 12.5% of pensionable pay across nine pay bands: 5.5% for pay up to £18,400, 6.5% for £29,001 to £47,300 and 12.5% for £210,701 or more (full table). Your employer decides your rate when you join and each April. Taxpayers get tax relief on contributions as they are deducted from pay. Most members can swap part of the pension for tax-free cash at £12 for every £1 given up, within an HMRC limit; see the lump sum page.

Years before April 2014: final salary, the 85-year rule and the underpin

Membership before 1 April 2014 stays in the final salary scheme: 1/60th of final pay for membership built up between 1 April 2008 and 31 March 2014, and 1/80th for earlier years, with an automatic lump sum of three times the pension. Those benefits keep a protected Normal Pension Age, which for most people is 65. If you were a member at any time between 1 April 1998 and 30 September 2006 you may be protected by the 85-year rule, and some members also have the McCloud underpin, an extra check against final salary rules.

Taking it: from 55 now, 57 from 6 April 2028

The member site says you can take the pension at any time from age 55 to 75, once you have met the two-year qualifying period, and must take it by 75; voluntary retirement also means leaving your job. It adds: "The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028. This will not apply to ill health retirements." Full payment comes at Normal Pension Age, which for benefits built up from April 2014 is linked to State Pension age but is at least 65 (details).

Starting sooner "will normally be reduced because it is being paid earlier", and the earlier you go the larger the cut, though your employer may decide not to apply all or part of it; starting later increases it. The early retirement reductions page has the factors. Losing your job to redundancy or business efficiency at 55 or over, with two years' membership, brings your main benefits at once without that reduction, though extra pension you bought through APCs, SCAPCs or ARCs is reduced; this route's minimum age also rises to 57 from 6 April 2028 (redundancy rules). Matching these dates and reductions to your own record is work an FCA-authorised adviser will do with you on a free call; the request takes a minute on this page's form.

The 50/50 section: half the cost, the same life and ill-health cover

The 50/50 section halves both sides. You pay half the usual rate, 1/98th of pay goes into the pension account instead of 1/49th, and "You keep full life and ill-health cover if you join the 50/50 section." It is meant as a short-term option: your employer must move you back into the main section roughly every three years.

After two years' membership, ill-health benefits can be paid at any age without a reduction for early payment, if your employer, on an independent occupational health physician's opinion, is satisfied that you are permanently unable to do your job until Normal Pension Age and are not immediately capable of gainful employment. Your employer sets the tier: Tier 1 adds the pension you would have built up to Normal Pension Age, Tier 2 adds 25% of it, and Tier 3 pays only what you have built, temporarily, for three years at most (ill-health retirement).

A member who dies in service leaves immediate life cover, plus pensions for eligible children and for a spouse, civil partner or eligible cohabiting partner. Details are on the death benefits page.

If you are still thinking of opting out

You opt out by giving your employer written notice, on a form from your pension fund; "Your employer cannot give you an opt out form." The scheme warns that opting out "may reduce your income in later life".

  • Under three months: treated as never a member, contributions refunded.
  • Three months to under two years: a refund (20% tax is taken) unless you already have a deferred LGPS pension or one in payment, a transfer to another qualifying scheme, or, if you joined before 1 April 2014, deferred benefits.
  • Two years or more: deferred benefits, which you cannot take until you leave your job unless you reach 75; if you rejoin, the two periods stay separate.

You can opt back in before 75. Other leavers' choices are under leaving the scheme, and joining rules under who can join.

Scotland and Northern Ireland run their own schemes

Scotland has its own member website, LGPS Scotland, whose rates from April 2026 run from 5.5% to 12% in five tiers, with contributions "based on how much of your pensionable pay falls into each tier". Northern Ireland's Local Government Pension Scheme is run by NILGOSC.

Guarantees, second jobs and flexible retirement

Are local government pensions guaranteed?

The member site describes "a secure and guaranteed income every year when you stop working". The amount still depends on your pay and years, and the contribution bands "may change in the future".

Can I take my LGPS pension while still working?

Yes, through flexible retirement, from 55 after two years' membership and only with your employer's agreement: you cut your hours or step down a grade and draw some or all of your pension (any built up before 1 April 2008 must be taken), possibly reduced for early payment. Here too the earliest age rises to 57 from 6 April 2028.

What if I have two LGPS jobs?

Each job has its own pension account, and your employer sets your contribution rate separately for each.

Which fund looks after my pension?

One of 86 local funds, depending on where you work; the fund finder page explains. Funds give information, not financial advice; MoneyHelper offers free, impartial information.

Choosing between the main section and 50/50, or when to start drawing the pension, sits more easily beside your wider retirement income, and an FCA-authorised adviser makes that comparison free by phone for any LGPS member who completes this page's form.

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