The cost to you

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The Local Government Pension Scheme is an important part of your employment package and is a valuable benefit on top of your pay.
The cost of being a member of the Scheme is less than you might think.
  • How much it costs you depends on how much you are paid but it’s currently between 5.5% and 12.5% of your pay. The rate you pay depends on which pay band you fall into. 
  • If you work part-time, your rate will be based on the pay you actually earn.
  • It costs even less if you pay tax as you get tax relief on your contributions.
  • There are restrictions on the amount of tax relief available on pension contributions. If the value of your pension savings increase in any one year by more than the Annual Allowance (AA) you may have to pay a tax charge. Most people will not be affected by the AA.
The LGPS is one of the best ways to plan for retirement with an excellent range of benefits that both full-time and part-time employees can enjoy.
These include after 2 years in the Scheme:
  • A tiered ill health retirement package if you have to leave work at any age due to permanent ill health. This could give you benefits, paid straight away, and which could be paid at an increased rate if you are unlikely to be capable of gainful employment within 3 years of leaving.
  • Flexible retirement from age 55 if you reduce your hours, or move to a less senior position. Provided your employer agrees, you can draw some or all of your benefits – helping you ease into your retirement.
  • You can even stay in the LGPS if you carry on working beyond your Normal Pension Age, although you have to draw your benefits by age 75. Benefits drawn after your Normal Pension Age will be paid at an increased rate.