Thinking about retiring

You can retire, leave your job and take your pension any time between age 55* and 75.

If you take your pension benefits before your normal pension age they will (usually) be reduced because you’re getting them early. And if you take your benefits later than your normal pension age, your benefits will be increased.

What is my normal pension age?

Your normal pension age is the age you can retire and take the pension you have built up in full. This is the same as your state pension age, which you can check online at gov.uk.

Final salary membership

If you joined the scheme before April 2014 you have a protected normal pension age of 65 (except for a very small number of members with an earlier protected age of 60). The protection means that if you claim your pension at your protected normal pension age, you’ll get the pension you built up in the scheme before 1 April 2014 in full.

*Changes to retirement ages

The UK Government has announced that the earliest age you can take your pension will increase from age 55 to 57 with effect from 6 April 2028. This does not apply if you have to take your pension early due to ill health.

You could be protected from this increase if you joined the LGPS before 4 November 2021. You could also be protected if you transferred a previous pension into the LGPS if certain conditions are met. However, you will only be able to use this protection when you take your LGPS pension if the LGPS rules allow you to take your pension before age 57.

The UK Government makes the LGPS rules. It has not yet confirmed if it will allow members who qualify for protection to take their LGPS pension before age 57, from 6 April 2028.

You must be at least age 55* to receive a pension and your employer must authorise these types of retirement.

Your pension will be payable immediately (with no reduction for early payment) if you are made redundant or if you lose your job for business efficiency reasons when age 55 or over. If under 55 your pension benefits will be deferred. 

The pension paid would be based on what you have built up in the scheme up to the date you leave. There is no additional enhancement to the benefits. 

*Changes to retirement ages

The UK Government has announced that the earliest age you can take your pension will increase from age 55 to 57 with effect from 6 April 2028. This does not apply if you have to take your pension early due to ill health.

You could be protected from this increase if you joined the LGPS before 4 November 2021. You could also be protected if you transferred a previous pension into the LGPS if certain conditions are met. However, you will only be able to use this protection when you take your LGPS pension if the LGPS rules allow you to take your pension before age 57.

The UK Government makes the LGPS rules. It has not yet confirmed if it will allow members who qualify for protection to take their LGPS pension before age 57, from 6 April 2028.

You must be aged 55* or over and receive your employers permission to have a flexible retirement.

If your employer allows it, you can reduce your hours and/or your pay grade from age 55 and draw some or all of your pension while continuing to work.

If you retire flexibly before your normal pension age your benefits may be reduced. You should ask your employer what their flexible retirement policy is if you are interested in flexibly retiring. 

Changes to retirement ages

The UK Government has announced that the earliest age you can take your pension will increase from age 55 to 57 with effect from 6 April 2028. This does not apply if you have to take your pension early due to ill health.

You could be protected from this increase if you joined the LGPS before 4 November 2021. You could also be protected if you transferred a previous pension into the LGPS if certain conditions are met. However, you will only be able to use this protection when you take your LGPS pension if the LGPS rules allow you to take your pension before age 57.

The UK Government makes the LGPS rules. It has not yet confirmed if it will allow members who qualify for protection to take their LGPS pension before age 57, from 6 April 2028.

Ill health benefits can be paid at any age and are not reduced because of early payment – your benefits could even be increased to make up for your early retirement.

Ill health retirement – a guide for active members of the LGPS

To qualify for ill-health benefits

•  you have to meet the scheme's two-year 'vesting' (qualifying) period
• your employer - based on an opinion from an independent registered medical practitioner (IRMP) appointed by them - must be satisfied that you'll be permanently unable to do your own job until your normal pension age, and
• you must not immediately be capable of gainful employment*.

There are graded benefit levels based on how likely you are to be capable of gainful employment after you leave:

Tier 1
If you're unlikely to be capable of gainful employment before your normal pension age, ill-health benefits are based on

• the pension you already built up in your pension account at your date of leaving the scheme, plus
• the pension you would have built up - calculated on assumed pensionable pay - if you'd been in the main section of the scheme until you reached your normal pension age.

Tier 2
If you're unlikely to be capable of gainful employment within three years of leaving, but are likely to be capable of gainful employment before your normal pension age, ill-health benefits are based on

• the pension you already built up in your pension account at your date of leaving the scheme, plus
• 25% of the pension you would have built up - calculated on assumed pensionable pay - if you had been in the main section of the scheme until you reached your normal pension age.

Tier 3
If you're likely to be capable of gainful employment within three years of leaving, or before your normal pension age if that's earlier, ill-health benefits are based on

• the pension you already built up in your pension account at leaving.

Payment of these benefits will stop after three years, or earlier if you are in gainful employment or become capable of gainful employment, as long as you haven't reached your normal pension age by then.

If the payment is stopped it usually starts again from your normal pension age, but it can be paid earlier in some cases and details would be provided at the time.

If you have previously received a Tier 1 ill-health pension from the LGPS, or were awarded an LGPS ill-health pension before 1 April 2008, no enhancement can be added to your pension account if you retire again because of ill health.

If you previously received a Tier 2 ill-health pension from the LGPS, any enhancement due on a subsequent ill-health retirement is adjusted and capped. If you're awarded a Tier 1 or Tier 2 pension for the subsequent ill-health retirement, the enhancement can't exceed

• three quarters of the number of years between the initial ill-health retirement and your normal pension age, less
• the number of years of active membership since the initial ill-health retirement.

*Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

If your retirement date is imminent (within the next six months) please ask your employer to request an estimate of benefits for you. They'll give us the accurate pay figures we need to calculate your pension benefits.

If you're planning to retire further into the future (not within the next six months), please refer to your latest pension statement to see your projected pension benefits.

Your latest statement will show what your benefits will be if you decide to take your pension at age 55 (or your current age if you are already over age 55), 60, 65 and at state pension age.

You can also log in to your online pension account and run estimate calculations for yourself. 

If you decide to retire you need to tell your employer.

Before deciding to retire you should look at your annual pension statement, create an estimate in your pension account and consider getting a full estimate sent to you (we can only send you one per year though).

Retiring from the LGPS is easy. First tell your employer that you want to retire. Your employer will send us a retirement notification. When we get that we'll send you a retirement pack telling you what your pension will be and inviting you to claim.

If you are under age 75, you can usually defer claiming your benefits if you want to.

When we get your completed pension claim form, we'll pay your pension, on the next available payroll. We'll pay your pension monthly to your nominated bank account.

See I'm receiving a pension for a list of pension payment dates. 

If you chose to take a lump sum as well as a pension, we'll pay your lump sum within 10 working days from the later of

• your date of retirement, or
• the date we get your claim form.

The payment might take a few days to clear and appear in your bank or building society account.

We can’t pay your benefits before your official leaving date.

When you claim your LGPS benefits you can choose to take some of your pension as a one-off tax-free lump sum.

If you want to do this, you should tell us how much lump sum you want when you fill in your retirement claim form. If you don't want to exchange any of your pension for lump sum you don't have to. But if you were an active member before 1 April 2008 you will have built up an automatic lump sum that you must take. 

The lump sum you get by exchanging pension is worked out using this simple formula.

• For every £1 of pension you exchange you get £12 of lump sum. So for example if you swap £250 of pension you'll get £3,000 of lump sum. 

Your annual pension statement and the estimate calculator in your pension account show you what your estimated minimum and maximum lump sum options are. HMRC rules mean you won't be able to swap all your pension for a lump sum.

There is also a tax limit called the lump sum allowance. This won't affect everyone but you can read more about it here.

If you have paid extra contributions you'll be entitled to these benefits at the same time as you receive your main LGPS benefits.

AVCs

We’ll write to you about these once we receive details from your AVC policy provider and we'll include all the information you need with your retirement claim forms. 

Think about stopping paying into your AVC a few months before your retirement date - this can help speed up your retirement process. 

Find out more about AVCs here. 

APCs

If you have paid extra contributions as APCs they will be included in your benefits as shown in your retirement pack. 

ARCs and additional service

These will also be included in the benefits shown in your retirement pack. 

Please note that ARCs and additional service purchase are historical options and not part of the current LGPS rules. You can read about them here.

Usually, if you're re-employed in local government or by an employer that offers LGPS membership, you don't need to tell anyone and your pension in payment is unaffected.

But if your pension is an ill-health pension it might be reviewed, so you must tell us, or tell the fund paying the pension if it's not one of our four shared-service partners.

If you retired before April 2014 and got an enhancement to your benefits, you should tell the fund that pays your pension if you are re-employed in local government. 

From 1 April 2014 the LGPS became a career average scheme

In a career average or CARE scheme, you build up a pension of 1/49 of your pay each year. That amount is added to your pension account at the end of the scheme year. To make sure your pension keeps pace with the cost of living over the years, we 'revalue' the total in your account every year in line with the Consumer Prices Index (CPI). Your pension will almost always go up but it can go down if CPI is a negative number. Once in payment your pension will not go down even if CPI is a negative number.

If you move to the 50/50 section of the scheme at any time, you’ll get half the normal pension for that period.

When you take your pension you’ll be able to give up some of your pension to get a tax free lump sum if you want to. For every £1 of pension you give up, you’ll get £12 of tax-free lump sum (HM Revenue and Customs limits apply).

You can read more about the CARE scheme rules in the knowledge hub.

From 2008 to 2014 the LGPS was a final salary scheme with no automatic lump sum. 

For membership built up from 1 April 2008 to 31 March 2014, you get a pension of 1/60 of your final pay multiplied by the number of years you were a member in this period. You don't get an automatic lump sum for membership built up after March 2008, but you do have the option to exchange some of your pension for a tax-free lump sum at a rate of £1 pension for £12 of lump sum.

If you worked part-time, your pay or membership will take that into account. 

Read more about the final salary rules in the knowledge hub.

Until 2008 the LGPS was a final salary scheme with an automatic lump sum. 

For membership up to 31 March 2008, you get a pension of 1/80 of your final pay plus an automatic tax-free lump sum of three times your pension.

If you worked part-time, your pay or membership will be adjusted for that. 

You can read more about the final salary rules in the knowledge hub.