The Local Government Pension Scheme, usually shortened to the LGPS, is one of the largest funded pension schemes in the UK and a major reason many people choose a career with a council. Unlike a private pension that depends on stock-market returns alone, the LGPS promises a defined level of income in retirement based on your salary and service. This guide explains the essentials in plain English.
What kind of pension is it?
The LGPS is a career average revalued earnings scheme, often abbreviated to CARE. Each year you build up a slice of pension worth a set fraction of that year's pensionable pay, and those slices are revalued in line with inflation. When you retire, the slices are added together to give your annual pension. Because it is a defined benefit scheme, the income you receive does not rise and fall with investment markets in the way a personal pension pot would.
- You build pension each year as a fraction of your pensionable pay
- Built-up amounts are revalued to help keep pace with inflation
- Your pension is paid for life once you reach retirement
- A separate cash lump sum can usually be taken by giving up some pension
Who can join, and what it costs
Most employees of councils and many related public bodies are automatically enrolled into the LGPS when they start, and you can opt out if you choose, though that is rarely a good idea given the employer contribution. Your own contribution rate depends on how much you earn, with higher earners paying a larger percentage. Crucially, your employer also pays in substantially on your behalf, which is effectively additional reward on top of your salary. Many roles across council jobs and the wider local government sector offer LGPS membership.
Tax relief and value
Your contributions receive tax relief, so part of what you pay in would otherwise have gone to the taxman. Combined with the employer contribution and the inflation-linked guarantee, this makes the LGPS far more valuable than it might appear from your payslip alone. If you want to see how pensions compare across the public sector, our overview of public sector pensions puts the LGPS alongside the NHS and Civil Service schemes.
Flexibility and life events
The scheme includes useful protections beyond the basic pension. There is typically a lump sum payable if you die in service, ongoing pensions for a partner or eligible children, and ill-health provisions if you cannot continue working. You can also pay extra to boost your benefits through additional contributions, and there are options if you work part-time or take a career break.
- Death-in-service lump sum and survivor pensions for dependants
- Ill-health retirement provisions if you cannot keep working
- Options to buy extra pension through additional contributions
- Part-time service counts proportionately towards your benefits
When and how you can take it
There is a normal retirement age linked to your State Pension age, but you can often take benefits earlier or later, with adjustments to reflect that. Taking benefits early usually reduces the annual amount, while delaying can increase it. Your pension fund will provide an annual statement and online tools so you can model different scenarios before deciding.
The LGPS is a genuinely strong benefit that adds significant long-term value to a local government career, even before you count the salary. Rules do change over time and individual circumstances vary, so this article is general information rather than formal financial or careers advice. Always read your own scheme guide and consider speaking to a qualified adviser about major pension decisions.