Additional Pension Contributions
If you are in the main section of the LGPS, you can pay additional contributions to buy extra pension. The most that you can buy is £8,344 of extra yearly pension. You can pay for the extra pension by paying Additional Pension Contributions (APCs) over a number of complete years or by paying a lump sum.
The cost of buying extra pension depends on your age, how much yearly pension you buy and how you choose to spread the payments. The cost of buying extra pension is reviewed every few years. If you buy extra pension by paying regular contributions, the amount you pay each pay period may change in the future.
You cannot buy extra pension if you are in the 50/50 section of the LGPS.
If you wish to buy extra pension by paying a lump sum, there are two ways that you can do this:
- through your pay – if you pay tax, you will receive tax relief through the payroll
- pay your pension fund directly – you will need to arrange tax relief with HMRC. You can do this via your self assessment tax return or by contacting HM Revenue and Customs. You can read more about Tax on your private pension contributions - This link opens in a new browser window on the Government website.
If you pay Additional Pension Contributions over a number of years, the regular contributions would be taken from your pay, just like your normal pension contributions. Your normal contributions and additional contributions are deducted before your tax is worked out. If you pay tax, you will receive tax relief automatically through the payroll. Tax relief is available on all pension contributions up to 100% of your taxable earnings.
The shortest period that you can spread APC payments over is 12 months. The maximum is the number of years to your Normal Pension Age. Your Normal Pension Age is linked to your State Pension age. If you are a year or less from your Normal Pension Age, you can only pay by lump sum.
Use the Extra pension calculator to find out more about paying Additional Pension Contributions and the cost to you.
Employer awards of extra pension
Your employer can award you with extra pension of up to £8,344. They can award this to you while you are an active member. They can also award you extra pension within six months of leaving your job, but only if you leave because of redundancy or business efficiency. This is a discretion. You can ask your employer about their policy on awarding extra pension.
Taking your extra pension
Any extra pension that you or your employer has paid for is attached to your LGPS benefits. The extra pension will be paid to you when you take your main LGPS pension. The extra pension is payable from your Normal Pension Age. It will generally be reduced if you take your pension early, or increased if you take it later. Different rules apply if you retire because of ill health. You can find out more about buying extra pension in the Buying extra pension – terms and conditions.