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

Taking your pension

Taking your LGPS pension will affect your income in later life. It is important that you make the right decisions for you.

Overview

You can take your LGPS pension at any time from age 55 to 75, as long as you have met the two-year vesting period. You must take your pension by age 75. If your employer agrees, you can even take your pension without leaving your job – this is called flexible retirement.

The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028. This will not apply to ill health retirements. Special rules apply if you have to retire because of ill health.


Life after work 01:37

How and when you can take your pension and the decisions you will have to make.

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Visit the Videos page to watch more of our ‘Pensions made simple’ videos, including Welsh language versions.

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Normal Pension Age

Your benefits are paid in full if you choose to take them from your Normal Pension Age. For benefits built up from April 2014, your Normal Pension Age is linked to your State Pension age, but is at least age 65.

The Normal Pension Age for benefits built up in the LGPS before 1 April 2014 is protected. For most people, the protected Normal Pension Age for these benefits is 65.

If you were a member of the LGPS at any time between 1 April 1998 and 30 September 2006, some or all of your benefits could be paid in full before age 65 if you are protected by the 85-year rule. You can find out more about the 85-year rule in the section below. 

If you choose to take your pension before your Normal Pension Age, it will normally be reduced because it is being paid earlier. The earlier you take your pension, the bigger the reduction will be. You can find out more in the Early retirement reductions section below.

Your employer may decide not to apply all or part of any reduction. You can ask them what their policy on this is.

If you take your pension after your Normal Pension Age, it will be increased. The increase is based on the number of days from your Normal Pension Age to the date you take your pension.

You cannot take your benefits built up before 1 April 2014 separately from the benefits you built up from 1 April 2014. Once you have left your job and choose to take your pension, you must take your whole LGPS pension at the same time. Different rules apply if you take flexible retirement and these are set out in the next section.

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Your options

Voluntary retirement

You can choose to take your pension when:

  • you are age 55 or over
  • you have met the two-year vesting period, and
  • you have left your job.

Flexible retirement

Flexible retirement is a way to move gradually into retirement. You can take flexible retirement:

  • from age 55 onwards
  • if you have met the two-year vesting period, and
  • only if your employer agrees.

Under flexible retirement, you reduce your hours or move to a less senior position and take some or all of the pension benefits you have built up. You must take any benefits you built up before 1 April 2008.

You can ask your employer about their policy on flexible retirement.

Increase to earliest payment age

The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028. This will not apply to ill health retirements.

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The 85-year rule

If you were a member of the LGPS at any time between 1 April 1998 and 30 September 2006, you may be protected under the 85-year rule.

You satisfy the 85-year rule when your age and length of LGPS membership add up to 85. Your age and Scheme membership are both measured in full years for this purpose. If you work part time, your membership counts towards the 85-year rule at its full calendar length.

The 85-year rule will apply if you are over age 60 when you retire. If you fully retire between age 55 and 60, the 85-year rule will not automatically apply and your benefits will be reduced. Your employer can choose to allow the 85-year rule to apply. This is a discretion. You can ask your employer about their policy on this.

If you take flexible retirement, the 85-year rule will apply to the benefits you have built up to the date you first take flexible retirement, even if you are under 60. The 85-year rule will not protect any benefits you build up after you first take flexible retirement.

What the 85-year rule means for you depends on your age, the date you meet the 85-year and the date you take your LGPS benefits. If you are protected:

  • and you take your benefits after you satisfy the 85-year rule, some or all of your benefits will be paid without reduction
  • and you take your benefits before you satisfy the 85-year rule, your benefits will be reduced but the early payment reduction will be lower than the normal reduction that applies to a member who is not protected.

The rules governing how the 85-year rule works and the level of protection you will get are complex. If you are thinking of retiring, you should Contact your pension fund for an estimate of the benefits you will be entitled to. If you are thinking about flexible retirement, you should contact your employer to check their policies on flexible retirement.

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Redundancy or business efficiency

If you:

  • lose your job because of redundancy or business efficiency
  • have met the two-year vesting period, and 
  • are age 55 or over

your LGPS benefits must be paid to you immediately.

If you leave after your Normal Pension Age, your benefits will be increased.

If you are under your Normal Pension Age, your main LGPS benefits will not be reduced for early payment. However, if you have bought any additional pension, this will be reduced because of early payment. This applies to any additional pension paid for by:

  • Additional Pension Contributions (APCs)
  • Shared Cost Additional Pension Contributions (SCAPCs), or
  • Additional Regular Contributions (ARCs).

Increase to earliest payment age

The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.

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Early retirement reductions

If you choose to take your pension benefits before your Normal Pension Age, they will normally be reduced. First, your benefits are calculated as usual, and then reduced. You can find out more about How your pension is worked out.

The reduction is based on the period between the date your benefits are paid and your Normal Pension Age. The earlier you take your pension, the bigger the reduction.

The current reductions for taking your benefits up to 13 years early are shown in the table below. If the number of years is not exact, the reductions will be adjusted.

Number of yearsPension reductionLump sum reduction (for membership to 31 March 2008)
00%0%
15.1%2.3%
29.9%4.6%
314.3%6.9%
418.4%9.1%
522.2%11.2%
625.7%13.3%
729.0%15.3%
832.1%17.3%
935.0%19.2%
1037.7%21.1%
1141.6%N/A
1244.0%N/A
1346.3%N/A

Your employer can agree not to reduce your LGPS benefits. This is a discretion and you can ask them what their policy on this is.

You can reduce or avoid any reductions by taking your pension later. Your benefits are normally payable from your Normal Pension Age. You can delay payment beyond your Normal Pension Age, but only if you left the Scheme after 31 March 1998. You must take your pension by age 75.

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The underpin – an additional protection

You may be protected by the underpin if you were: 

  • paying in to the LGPS on 31 March 2012
  • age 55 or over on 1 April 2012, and
  • a member after 31 March 2014 and were under age 65.

You may also be protected by the underpin if you were a member of a different public service pension scheme on 31 March 2012, and you have transferred that pension to the LGPS.

If you are protected, your pension fund will check your pension against the pension you would have built up in the final salary scheme. Your pension will be increased if it is lower. You can find out more about the underpin calculation and qualifying conditions.

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Taking your deferred pension

If you left the LGPS on or after 1 April 1998

Your deferred benefits are payable in full from your Normal Pension Age in the LGPS. You do not have to take your deferred benefits at your Normal Pension Age, you can take them at any time between age 55 and 75. If you were a member of the Scheme before and after 1 April 2014, the benefits built up before 1 April 2014 will have a protected Normal Pension Age – usually age 65.

Choosing to take your deferred benefits early

You can choose to take your deferred benefits from age 55 onwards. You do not need your former employer’s consent to take your pension early. See the section on Early retirement reductions above to find out about how your benefits will be reduced.

If you were a member of the LGPS at any time between 1 April 1998 and 30 September 2006, some or all of your benefits could be paid in full before age 65 if you are protected by the 85-year rule. Find out more about the 85-year rule in the section above.

Taking your deferred benefits from your Normal Pension Age

If you do not take your deferred benefits early, they will normally be paid from your Normal Pension Age. You can choose to delay payment beyond that age.

If you take your deferred benefits after your Normal Pension Age your pension benefits will be increased. You must take your deferred benefits by age 75.

If you have a Guaranteed Minimum Pension, it may not always be possible to delay payment of your whole pension. Contact your pension fund for more information about this.

Taking your deferred pension if you are too ill to work

If you are too ill to work, you can ask for your deferred pension to be paid immediately, whatever your age.

Your former employer will need to consider if you are permanently unable to do your old job because of your ill health. If you left the LGPS after 31 March 2008, they would also need to consider whether you are able to undertake any gainful employment in the next three years.

Gainful employment is paid employment of at least 30 hours per week that lasts for a year or more.

If your application is successful, your deferred benefits would be paid to you immediately. Your benefits would not be reduced for early payment.

If you left the LGPS before 1 April 1998

Your deferred pension benefits are normally payable in full at your Normal Pension Age. Your Normal Pension Age is:

  • age 60, if you would have built up 25 years membership if you had remained in the scheme until then, or
  • the date you would have built up 25 years membership if you had remained in the scheme, if that date falls between your 60th and 65th birthday, or
  • age 65 if, by that age, you would not have built up 25 years membership if you had remained in the scheme until then.

You must take your benefits from your Normal Pension Age if they are not already in payment. 

Early payment of deferred benefits at your request

You can choose to take payment of your deferred benefits from age 55. You do not need your former employer’s consent to take your pension early. See the section on Early retirement reductions above to find out about how your benefits will be reduced.

Early payment of deferred benefits on compassionate grounds

You can ask your former employer to pay your benefits early on compassionate grounds. If your former employer agrees, your benefits will not be reduced for early payment. This is a discretion and you can ask your employer what their policy on this is.

Early payment of deferred benefits due to permanent ill health

You can apply for payment of your deferred benefits because of your health at any age. Your former employer would need to consider whether you are permanently incapable of doing the job you were working in when you left the LGPS. If your application is successful, your pension benefits will be paid immediately and would not be reduced for early payment.

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