Considering opting out?

The rising cost of living is giving lots of people new money worries.

We understand that contributing to a pension may seem like an unnecessary luxury. Opting out of the scheme may seem a sensible idea currently.

Before you act it's worth thinking about the benefits of the Local Government Pension Scheme:

  • A secure pension for life, with annual adjustments in line with the cost of living.
  • A tax-free lump sum when you retire.
  • Ill-health retirement if you have to stop work due to a serious illness.
  • Redundancy benefits if you’re made redundant or have to retire due to business efficiency after age 55.
  • Death benefits for your family. These include:

             - a partner’s pension and children’s pensions, plus

             - a cash lump sum of three times your pay, paid to the person of your choice.

And remember that your employer pays a large pension contribution on your behalf. These contributions (together with yours) all help your standard of living in retirement. We recommend you take financial advice before you opt out of the LGPS.

Reducing your contributions

Did you know you can reduce your contributions but remain in the scheme?

You can pay half your normal contributions in return for half your normal pension. It's called the 50/50 section of the scheme and can help members when times are financially tough.

You keep death in service and survivor benefits when you are in 50/50 section. You’ll need to speak to your employer if you would like to move into the 50/50 section. They can give you a form to complete.

The 50/50 option is designed to be a short term solution. You will be auto enrolled back into the main section of the Scheme in line with your employer's automatic re-enrolment date, so at least after three years. You will also go back into the main section of the Scheme if you are not working due to absence or injury and are receiving no pay. If you wish to continue to use the 50/50 option you must make a further election to your employer.

You can of course choose at any time to move back to the main section of the Scheme. Your employer will do that from the pay period following your written request.

Further support

The LGPS member website has:

A calculator which shows the cost of your contributions if you moved to the 50/50 section.

Access calculator here

A set of questions and answers related to the cost of living crisis.

Access cost of living questions and answers