Leave after the LGPS two-year qualifying period and your local government pension stays deferred in the scheme; leave sooner and a refund is usual.

Leaving an LGPS employer does not cancel what you have built up, but what you keep depends on your dates. This page covers the England and Wales scheme; Scotland and Northern Ireland (NILGOSC) run separate schemes, so use their own member websites. Your fund can confirm whether your leaving date earns a deferred pension or only a refund. For the wider picture, this page's form arranges a call-back, without charge, with an FCA-authorised adviser.

What happens to my local government pension if I leave my job?

It turns on whether you had met the scheme's two-year qualifying period. Meet it and you have a deferred pension, kept in the scheme; miss it and you can generally claim a refund of your contributions or, in some cases, move their cash value elsewhere.

A deferred pension is not frozen. The member website states: "Your deferred pension will increase each April in line with the cost of living." See how an LGPS pension is calculated and LGPS pension increases.

It stays put until you take it, transfer it, or re-join and combine the two. A death grant will generally be paid if you die as a deferred member, and your partner and children may also receive pensions; LGPS death benefits sets out who gets what.

Extra pension you paid for is treated like this:

  • Additional Pension Contributions, Additional Regular Contributions and added years are credited when you leave, and they raise both the deferred pension and any transfer value.
  • In-house AVCs stay invested until paid out, but you cannot pay in after leaving, so life cover bought through them stops.
  • Special rules apply if you have more than one job in the LGPS, or your job moves to a private contractor, so ask your fund in either case.

Leaving with under two years: the refund and its limits

Without the qualifying period you get no deferred pension. You will generally have three choices: claim a refund, transfer the cash value of the deferred refund, or delay deciding.

The refund covers your pension contributions and extra ones such as APCs and most AVCs, but not AVCs paid for life cover. The member website says: "Tax of 20 percent will be taken from the refund." HMRC sets this charge as 20% on the first £20,000 and 50% above that.

You need not rush. The scheme says: "You can delay payment for up to five years after leaving the LGPS, or until age 75 if this is sooner." Interest at 1 percent above base rate is added if payment comes more than a year after you left. You cannot take a refund if you re-join in England or Wales within a month and a day of leaving, or before claiming, or if you still pay into the LGPS in another job.

If you were a member for more than three months, you may be able to move the refund's cash value to another arrangement, usually within a limited time. And if you first joined before 1 April 2014 and leave with between three months and two years' membership, you may choose a deferred pension instead; for a refund in that case, "you must claim your refund within six months of leaving".

Starting another LGPS job: will the pensions join together?

Often they do, without you doing anything. The member website says: "In most cases, your deferred benefits will be joined with your pension account automatically unless you elect to keep them separate." You have a year from re-joining to elect, unless your employer allows longer.

The scheme lists exceptions, including:

  • Left with a deferred pension before 1 April 2014: you must elect to join it, or it stays separate.
  • Opted out after 11 April 2015 with a deferred benefit: it cannot be joined, so you hold two accounts.
  • Under two years' earlier membership and no refund taken: the deferred refund must be joined.

Holding two LGPS jobs at once and leaving one is different: the pension from the ended job goes into the continuing account automatically, and if it qualified for a deferred pension you can elect to keep it separate within 12 months of that job ending, unless your employer allows longer.

The scheme warns that joining "may not always be in your interest", and the decision cannot be changed later. What tips it is in combining LGPS pensions from different jobs.

Taking a deferred pension early or late

You can generally take a deferred LGPS pension at any time from 55 to 75. The scheme says: "The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028." Ill health retirement is separate (see ill health retirement in the LGPS).

Before your Normal Pension Age the pension is normally reduced, by more the earlier you go, though your former employer can agree to waive all or part of it; see early retirement reductions and the Rule of 85. Waiting has the opposite effect: "If you take your pension after your Normal Pension Age, it will be increased." Delaying beyond that age is open only if you left the scheme after 31 March 1998, and it must be taken by 75. Your age is in the LGPS normal pension age.

Your fund and MoneyHelper are free starting points. Pension Wise appointments cover defined contribution pensions, usually from age 50; the main LGPS pension is defined benefit. Which of your pensions to leave alone, move or take early is a question about your whole picture. An FCA-authorised adviser can cover it on a free call-back, and you can ask for one with this page's form.

Transferring a deferred LGPS pension out

You can move a deferred pension to another scheme, with limits. You must have stopped paying in. You cannot transfer if you left less than a year before Normal Pension Age, or once the pension is in payment, and you will generally need more than three months' membership. With several deferred pensions in England and Wales it is all or none. A full transfer ends the link: "If you complete a full pension transfer, you will not be entitled to any benefits from the LGPS."

The advice rule matters most. The member website says: "You will be required by law to take independent financial advice before you can transfer if the value of your pension benefits in the LGPS is more than £30,000." That is for a move to a defined contribution scheme, and any in-house AVC fund is not counted. The legislation (SI 2015/742, regulation 5) sets the same £30,000 line on the transfer value of safeguarded benefits, and you pay for the advice yourself.

Advice is not a recommendation to go ahead. The FCA says: "The FCA and The Pensions Regulator (TPR) believe it's in most people's best interests to keep their DB pension." You would give up guaranteed increases and the death grant and survivor pensions.

Your fund quotes a value that is generally guaranteed for three months, and you return a written option form inside that window. The fund must also check for signs of a scam and can stop the transfer. Read how to transfer a pension, transferring out of the LGPS and the FCA's pension scams page first.

Quick answers for leavers

I am 55 or over and being made redundant: is my pension paid now?

After redundancy or business efficiency, with the qualifying period met, your benefits must be paid immediately, with the main pension unreduced, though extra pension bought through APCs or ARCs is reduced. The minimum age rises to 57 from 6 April 2028.

Is opting out the same as leaving my job?

No. Opting out means leaving the scheme while you stay in the job, by giving your employer written notice. After more than two years you would have a deferred pension, but you could not take it until you leave the job unless you reach 75, and a later re-join would not combine the two periods.

Who do I contact about my own record?

Your local fund, which may have its own website for specifics. Finding your LGPS fund explains how to tell which one.

Weighing a refund, a transfer or a wait is a choice that is hard to reverse. Should you want to talk it through, ask on this page's form for a call-back, with no fee, from an FCA-authorised adviser.

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