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For members of the Local Government Pension Scheme in England and Wales

What is a pension credit?

This news article was published on 21 Dec 2021

If you get divorced or your civil partnership is dissolved and your ex-spouse or civil partner has pension benefits in the LGPS, the Court could award you a share of those benefits. The Court could issue a pension sharing order or the benefits could be subject to a qualifying agreement in Scotland.

When the pension sharing order is implemented you will have the choice of a ‘pension credit’ in the LGPS or transferring your share to another pension scheme. Your ex-partner’s pension fund will inform you of:

  • the amount of pension that would be paid to you if you took a pension credit in the LGPS, and
  • the cash equivalent value of your share should you wish to transfer it to another pension scheme.

If you do not make a decision in the relevant time period, you will be awarded a pension credit in the LGPS.

If you are awarded a pension credit in the LGPS you can still choose to transfer it to another pension scheme at a later date. However, you are not allowed to transfer if you are within 12 months of your normal pension age.

You may need to take independent financial advice before you can complete a transfer. If your pension fund thinks you are at risk of being scammed they may also require you to attend a guidance appointment with MoneyHelper. Unfortunately, pension scams are on the rise in the UK. Falling victim to a pension scam could mean that you lose some or all of your pension savings. See the pension scam section for tips on how to protect yourself.

Pension credit benefits in the LGPS are personal benefits. You hold them in your own right and they are completely separate to those of your ex-spouse or civil partner.

No partner’s pension will be paid if you re-marry and die before the new spouse, nor will any children’s pensions be payable when you die. Children’s pensions remain ‘attached’ in full to your ex-spouse’s or ex-civil partner’s benefits in the LGPS.

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