The Local Government Pension Scheme (LGPS) explained: a career average pension for council and related staff, built at 1/49th of pay a year, on national rules.

If you work for a council, a school or another body that takes part in the LGPS, or you are weighing up a job that offers it, you may want to know what kind of pension it is and what you pay for it. This page describes the scheme in England and Wales. Your pension fund is the first stop for figures about your own pension, and MoneyHelper offers free, impartial information. To weigh a council pension against your other savings and income, an FCA-authorised adviser can phone for a free talk once your request goes in through the form on this page.

What kind of scheme the LGPS is

The member website calls the LGPS "a defined benefit pension scheme", so your pension rests on your pay and how long you pay in, and "is not affected by how well investments perform". That puts it in the same family as the pensions in our guide to final salary pensions, although the LGPS stopped being a final salary scheme in 2014.

It is run locally. England and Wales have 86 local pension funds between them, so the national rules are the same but your fund, its website and its administrators depend on where you work. Finding your LGPS fund explains how to tell which is yours, and whether the LGPS is funded covers where the money comes from.

The rules are in the Local Government Pension Scheme Regulations 2013 (SI 2013/2356), which "extend to England and Wales". Who is allowed to join is a separate question, answered in who can join the LGPS. If a member dies in service, the scheme provides immediate life cover and a pension for a spouse, civil partner or eligible cohabiting partner and eligible children.

LGPS Scotland has its own member website, which also puts 1/49th of pensionable pay into a pension account each year, but its final salary scheme covers membership before 1 April 2015, a year later than in England and Wales, and pension built up from April 2015 has a Normal Pension Age linked to State Pension age and at least 65. This page does not cover Northern Ireland.

What you pay in and what you build

Since 1 April 2014 the LGPS has been a career average scheme. Each year 1/49th of your pensionable pay is put into a pension account, and regulation 23 of the Regulations says the same. A member with more than one job has a separate account for each. Because every year's slice is based on that year's pay, the result reflects a whole career and not the last salary. How the account turns into a figure in retirement is in how your LGPS pension is calculated.

The balance does not stand still. At the end of each year it is adjusted in the following April for changes in the cost of living. In law the adjustment is the change in prices set out in a Treasury order made under section 9(2) of the Public Service Pensions Act 2013, and the order can specify a percentage increase or decrease. So the Treasury sets the figure for the whole scheme, not your fund. How the same idea works once a pension is being paid is in LGPS pension increases.

Every member pays, and the rate rises with pay: the member website puts it between 5.5% and 12.5% of pensionable pay, on bands that apply from April 2026 and "may change in the future". The nine bands, how your band is chosen and the Scottish rates are on the LGPS contribution rates page. On average employers pay roughly three quarters of the scheme's costs and members a quarter; employer contributions covers that side.

There is one lower-cost option. The 50/50 section halves both the contributions and the build-up, so 1/98th of pay goes into the account in place of 1/49th. Its stated purpose is to help members stay in the LGPS when times are financially tough, and extra pension cannot be bought while you are in it.

Taking the pension: age, reductions and the lump sum

Your pension is payable without an early-payment reduction from your Normal Pension Age. For pension built up from April 2014 that age is linked to your State Pension age "but is at least age 65", which follows the definition in Schedule 1 of the Regulations: the pensionable age under the Pensions Act 1995, "or if higher, age 65". What the State Pension itself pays is in our State Pension guide, and the scheme's age has its own page at LGPS normal pension age.

You need not wait for it. Once you have met the two-year qualifying period you can take the pension at any time from 55 to 75, and you must take it by 75. The earliest age rises from 55 to 57 from 6 April 2028; the member website says this will not apply to ill health retirements. Three points to weigh:

  • Starting before Normal Pension Age usually means a smaller pension, because it is paid for longer, and starting later means it is increased. LGPS early retirement reductions goes through the factors, and your employer can decide not to apply all or part of a reduction.
  • Flexible retirement lets you cut your hours or move to a less senior post and draw some or all of the pension, but only if your employer agrees.
  • Once you have left your job and choose to take the pension, you cannot take the part built up before 1 April 2014 separately from the rest.

Leaving through redundancy or business efficiency has its own rule, covered in redundancy and a final salary pension, and ill health has another, in ill health retirement and its LGPS page. Leaving earlier than any of that is in what happens to your LGPS pension if you leave, and what a pension left behind becomes is in deferred final salary pensions.

When you first take the pension you can give up part of it for a tax-free lump sum: "For every £1 of annual pension you give up you will get a lump sum of £12." The choice is made once, when the pension starts. The limits and what the swap does to yearly income are in the LGPS lump sum page.

Which age to start and whether to swap pension for cash turn on income needs, tax and the rest of a person's retirement money. An FCA-authorised adviser can lay the fund's quotation beside those; the callback is free, and the enquiry form on this page needs only a few details.

Service before 2014, and the McCloud underpin

A member from before April 2014 has two layers in one scheme. Membership between 1 April 2008 and 31 March 2014 earns "1/60th of your final pay as a pension"; before 1 April 2008 it earns 1/80th of final pay plus an automatic lump sum of three times the pension. Final pay is usually your pensionable pay in the year you leave, and pay from one of the previous two years can be used if it is higher.

Pension built up between 1 April 2014 and 31 March 2022 may carry a further protection, the underpin. After the McCloud court case on age discrimination the scheme's rules changed on 1 October 2023, backdated to 1 April 2014. A member is protected if they belonged to the LGPS or another public service scheme before 1 April 2012, were in the LGPS during that period, were under 65 in it, and have no "disqualifying gap" (more than five years outside every public service scheme). When the pension starts, the fund compares what was built up with what the final salary scheme would have given, and increases the pension if it is lower. There is no underpin protection from 1 April 2022. Your fund holds the records that decide it; the LGPS McCloud page has the detail. Anyone who was a member between 1 April 1998 and 30 September 2006 may also be protected under the 85-year rule, explained in the LGPS Rule of 85 page.

Paying in extra

Members in the main section can buy extra pension with Additional Pension Contributions, paid over at least 12 months or as a lump sum, up to £9,054 of extra yearly pension, the most the member website listed when read on 20 October 2026. The extra pension is added to the pension account. Additional Voluntary Contributions are different. They build a separate pot with an AVC provider your fund has arranged, they can be paid in either section, and a pot invested in this way can fall as well as rise. The detail is in topping up your LGPS pension and LGPS additional voluntary contributions.

Bringing older pensions in, or sending this one out, are separate questions: see transferring into the LGPS and transferring out of it.

Questions people ask about the LGPS

Is the LGPS a final salary or a career average pension?

Both, depending on the dates. Membership before 1 April 2014 is final salary and since then it has been career average. Either way it is a defined benefit scheme and not a defined contribution pot.

Is the LGPS better than a private pension?

The two work differently, so a single answer would mislead. The LGPS pays a pension based on pay and membership, whereas a private defined contribution pension is a pot whose value depends on contributions, charges and investment returns. The weighing is set out in whether the LGPS is any good.

Can Pension Wise help with an LGPS pension?

GOV.UK says the Pension Wise appointment does not cover final salary or career average pensions. MoneyHelper gives free, impartial information, though not financial advice. What Pension Wise is explains where it does apply.

What if I become seriously ill while a member?

The scheme says that if you become seriously ill and have met the two year qualifying period, you could receive your pension straight away. The tests and tiers are in ill health retirement in the LGPS.

Your next step

Ask your fund for a benefit statement and for your employer's early retirement policy. For a conversation about the LGPS alongside everything else you hold, the form on this page carries a free callback request from an FCA-authorised adviser.

Sources