How CARE works

The LGPS is designed to provide financial security in retirement. Here's how it works:

Each year, a portion of your salary is used to calculate your pension benefits. For the LGPS, this fraction is 1/49th.

The amount you earn each year is revalued (increased) to keep up with inflation. This means your pension grows over time even if your salary doesn't increase.

Every year's revalued amount is added together to form your total pension. When you retire, you'll receive this total amount as your annual pension.

Here's an example if you earn £30,000 a year:

Year 1: You earn a pension of £30,000 / 49 = £612.24 for that year.
This amount is then revalued (increased) each year based on inflation.

Year 2: Suppose your salary increases to £31,000. You then earn £31,000 / 49 = £632.65 for that year, which will also be revalued.

At retirement, the sum of all these revalued amounts will be your annual pension.

Here's an example of how a CARE pension account builds up.