Retirement Options

You can choose to take your LGPS pension voluntarily any time between age 55 and 75.

Your Normal Pension Age (NPA) is the age at which you can retire and take your pension in full, without any early-retirement reductions.

 

  • Benefits built from 1 April 2015 – NPA is linked to your State Pension Age (SPA), with a minimum of 65
  • Benefits built before 1 April 2015 – NPA is fixed at 65
  • Rule of 85 – If you joined the scheme before 1 December 2006, you may have some protections allowing you to take part or all of your benefits earlier without reduction.

You must take all your LGPS benefits at the same time, unless you’re taking Additional Voluntary Contributions (AVCs) separately.

Lump Sum
AVCs

Taking a tax-free lump sum

When you retire, you can swap some of your annual pension for a one-off tax-free lump sum.

 

  • For every £1 of annual pension you give up, you receive £12 as a lump sum
  • Most people can take up to 25% of the total capital value of their pension tax-free
  • If you joined before 1 April 2009, you automatically receive a tax-free lump sum and can increase it by converting more of your pension
  • Taking a larger lump sum doesn’t affect survivor benefits for your spouse, civil partner or eligible children.


This decision is final once you receive your first pension payment.

Use the LGPS lump sum calculator to see what this could mean for you.

You can also run your estimate by accessing My Pension Online. 

Additional Voluntary Contributions (AVCs)

If you’ve paid AVCs into an arrangement with Prudential or Standard Life you can:

 

  • Take some or all as part of your tax-free lump sum (subject to 25% overall limit)
  • Convert them into extra annual pension
  • Buy final salary membership (only if your AVC started before 30 June 2005)
  • Purchase an annuity from another provider
  • Take them separately from age 55
  • Delay taking them if you are flexibly retiring and still paying in.


Important information: Under current rules, you’ll be invited to receive free guidance from Pension Wise before taking AVC benefits.

Cost of living adjustment 

Your LGPS pension increases in line with the cost of living every year throughout your retirement. If the cost of living goes up, so will your pension. 

 

 

Other Retirement Types

Flexible Retirement
Redudancy/business efficiency

From age 55, with employer agreement, you can reduce your hours or move to a lower-graded role, take some or all of your pension, and keep building new LGPS benefits

If you are aged 55+ with at least 2 years’ membership and are made redundant or retired on business efficiency grounds, your pension is paid immediately in full, without reductions.

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