Should you combine LGPS pensions from different jobs? It turns on your dates, pay and plans; joining is usually automatic unless you opt out within a year.

Your own LGPS pension fund is the first place to ask: the member website tells anyone re-joining to contact it, and the fund explains the choices, the time limits and what happens if you do not decide. The fund will not decide for you: Buckinghamshire Pension Fund says its letters set out the options "but we cannot tell you if it is best to combine or not". Your fund's letter is what an FCA-authorised adviser would work from, setting it beside your other pensions and plans; the enquiry form here requests that call, without charge.

This guide covers England and Wales; where it describes letters, deadlines or defaults, they are Buckinghamshire's, and your own fund's letter sets out yours.

Should I combine my LGPS pensions? What the choice turns on

Four things decide it: the pay your old pension was based on against your pay now, the age each record can be taken without reduction, the lump sums and death benefits attached to each, and how you expect to retire. Buckinghamshire warns that "the value of your earlier deferred benefits could increase or decrease and the date they are paid without reductions could also change if you choose to aggregate".

The member website cautions: "It may not always be in your interest to join a deferred benefit with your active pension account." Yet in some cases combining raises the annual pension, or the partners' pensions payable on death (both below).

Can you combine LGPS pensions from different jobs?

Often, yes. Each job has its own pension account, and the member website confirms that someone re-joining the scheme can join the two periods of membership together. By record type:

  • A deferred record from an earlier job. You hold one if you met the two-year qualifying period when you left. It is joined to your new active account unless you elect to keep it separate (pre-2014 leavers differ, below).
  • A job that ends while another continues. A deferred pension from the ended job is aggregated with an ongoing account unless you elect to retain it.
  • An unclaimed refund. If you never built up a deferred pension and did not take a refund of contributions, that refund account has to be joined to your new account.

Some records cannot be joined: the member website lists a deferred pension from opting out after 11 April 2015 and a pension already in payment. Buckinghamshire also names two cases it cannot aggregate: leaving both employments on the same day, and receiving a Guaranteed Minimum Pension from the deferred benefit.

A pension from outside the LGPS is a transfer (transferring a pension into the LGPS, merging pensions generally); see also leaving the LGPS and deferred defined benefit pensions.

The 12-month election: when you must decide

Under regulation 22 of the LGPS Regulations 2013, a returning deferred member's benefits must be aggregated with the new account unless the member elects to keep them apart "within 12 months of the active member's pension account being opened" or "such longer time as the Scheme employer in relation to that active member's pension account permits". Deferred benefits that arose from opting out (a written notice to leave the scheme) fall outside that rule. The member website adds: "You will not be able to change your decision later."

  • Tell the new fund early. Buckinghamshire asks members to declare other LGPS accounts within their first 12 months, or risk wrong options or a lost chance to combine.
  • The letter sets a working date. Buckinghamshire's is 12 months after starting the new job, or 2 months from the date of its aggregation letter if that point has passed or you have since left.
  • Silence has a consequence. Without a reply, Buckinghamshire either combines the benefits or leaves them separate, depending on circumstances; if separate, the option cannot be looked at again.

For a job that ends while another continues, the same regulation gives 12 months from the date it ended, or longer if the continuing job's employer permits.

Pre-2014 membership: the final salary link

Service before 1 April 2014 is final salary; later service is career average. Where both jobs began after 1 April 2014 with no five-year gap, Buckinghamshire describes combining as moving one pot across with no effect on the value of the earlier benefits.

Regulation 10 of the 2014 transitional regulations covers someone in the scheme at the April 2014 changeover who later became deferred and returns. If the records are aggregated with "no continuous break in active membership of any public service pension scheme of more than five years", the pre-2014 rights stay on final salary, using final pay. After a longer break, aggregation gives a transfer value instead, credited to buy earned (career average) pension. A member with pre-2014 deferred benefits who was not in the scheme at the changeover may elect, within 12 months of the new account opening or longer if the employer permits, to have a transfer value buy earned pension. The pre-2014 protection then stops applying to that service.

Buckinghamshire compares the full-time-equivalent final salary in your later job with the one behind your deferred benefits, and "you may have the option of keeping the final salary link, even if you combine them". That figure is not take-home pay, and hours worked do not change it; the deferred figures could later rise or fall with it. For two jobs held at once where both memberships began before 1 April 2014, the member website says final salary membership is adjusted for the difference in whole-time pay: reduced if the continuing job pays more, increased if it pays less.

More on pre-2014 service is in how the LGPS works. If you think the McCloud remedy covers any of your service, ask your fund how combining would treat that protection (background: the McCloud remedy in the LGPS). Unsure which category applies? Your statement is something an FCA-authorised adviser will read through with you over the phone, without charge; this page's short form arranges it.

Deferred record or active record: what changes if you join them

A deferred record rises each April with the cost of living and, the member website says, can generally be taken at any time between 55 and 75, with the earliest age rising to 57 from April 2028. Buckinghamshire's guide lists what can change once records are joined; your fund's letter gives your figures:

  • Payment date. Combining may change the normal pension age of the earlier benefits, and joined accounts are released together, while a separate deferred record can be paid as you keep working.
  • Automatic lump sum. Benefits built up before 1 April 2008 carry one; combining may raise the annual pension but remove it. Pension can still be exchanged for cash at retirement (LGPS lump sum).
  • Redundancy at 55 or over. Combined, the right to unreduced payment covers everything; kept separate, a deferred record taken before normal pension age is reduced.
  • Ill health. Retiring on ill-health grounds from the current job releases only that job's account, and separate records need separate applications.
  • Death benefits. A member who dies in service with a deferred benefit too gets "the highest of the two, not both": three times pensionable pay, or five times the deferred pension for someone who left after 1 April 2008 (the automatic lump sum equivalent if earlier). Partners' pensions can come from both records, and combining may increase them even where the death grant falls.
  • AVCs. The member website says that on combining, LGPS AVCs must move to an AVC arrangement offered by the new fund.

See also early retirement reductions and normal pension age.

Questions about combining LGPS pensions

What if I do not reply to my fund?

It depends on the record. For most returners the regulations default to aggregation, but the member website says a deferred pension from leaving before 1 April 2014 stays separate unless the member elects to join it.

Can I combine LGPS pensions held with different funds?

Yes, in many cases. Buckinghamshire asks new members to tell it about LGPS accounts held with other funds so it can look into combining them, and for records with pre-2014 service the transitional regulations provide for the first fund to pay the second.

Can I undo a combination?

No. The member website says the decision cannot be changed later, so ask your fund for figures on both routes before the deadline.

Your next step

Start with your fund: ask for its aggregation letter or figures for both routes, and note the return date. Still unsure? Request a call-back here; an FCA-authorised adviser then talks through your aggregation choices, free of charge. The FCA tells anyone looking for an adviser to make sure they are authorised by it; read its pension scams page before acting on any unsolicited offer.

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