How much does it cost?
Joining the scheme will not cost as much as you might think
Your pension will be based on the actual pensionable pay you earn in each financial year i.e. the period between 1 April – 31 March. Each April your employer will decide your appropriate rate of contributions for each employment by matching your actual pensionable pay to the appropriate band in the contributions table below. However, if your pay exceeds the threshold for the contribution banding you have initially been allocated you may find your employer adjusts your contribution rate to reflect the higher pay.
This is the contribution banding rate applicable at 1 April 2023, and these rates will be revalued in line with the Price Index each April.
| Pensionable pay banding | Main scheme | 50/50 scheme |
|---|---|---|
| Up to £16,500 | 5.5% | 2.75% |
| £16,501 to £25,900 | 5.8% | 2.9% |
| £25,901 to £42,100 | 6.5% | 3.25% |
| £42,101 to £53,300 | 6.8% | 3.4% |
| £53,301 to £74,700 | 8.5% | 4.25% |
| £74,701 to £105,900 | 9.9% | 4.95% |
| £105,901 to £124,800 | 10.5% | 5.25% |
| £124,801 to £187,200 | 11.4% | 5.7% |
| £187,201 or more | 12.5% | 6.25% |
***Important***
Tax Benefits – your contributions are taken from your pay before it is taxed which means you have less tax to pay.
Use the Contribution Calculator to see how much you would pay
A Contribution Calculator is available on the LGPS website. The calculator requires you to input information including your annual pensionable pay, pay frequency, section of the scheme you are in/wish to join and whether you are over State Pension Age. The results include both the gross and net contribution amount for the scheme.
Option to pay lower pension contributions - the 50/50 scheme
One of the key features of the LGPS is the 50/50 scheme, which enables members to pay half rate contributions in exchange for half of their pension accrual. This may help some members who are temporarily unable, or have difficulty in paying the full amount of contributions if your financial circumstances change e.g. moving house, childcare costs, getting married.
The 50/50 scheme will allow you to remain as an active member of the scheme and pay lower contributions rather than opting out altogether. You would then still be able to take advantage of the benefits of being an LGPS member but contribute a lower, more manageable amount.
Main features of the 50/50 scheme:
- A reduction to your pension contributions by 50% and build up half of the pension (1/98th) you would have built up in the main scheme (1/49th)
- Full main scheme death benefits should anything happen to you while you are in the 50/50 scheme so your family is fully protected
- Automatic protection by being returned into the main scheme should you go out of pay due to sickness or injury so you are not disadvantaged
- Ill health protections should you become unable to work and have to retire because of ill health.
If you wish to sign up to the 50/50 scheme you will need to complete the following form I wish to sign up to the 50/50 scheme and return to your employer.