The Local Government Pension Scheme Explained
A plain guide for council staff, school support staff, and employees of many charities and contractors admitted to the scheme. What you pay in, what you get out, and the one rule that decides whether you can combine it with anything else.
The short answer
- The Local Government Pension Scheme (LGPS) is career average (care), defined benefit, and funded.
- You build 1/49th of pensionable pay each year.
- For benefits built up from April 2014, normal pension age is your State Pension age, with a minimum of 65.
- It is funded, so a transfer out is possible but rarely wise.
The LGPS at a glance
| Scheme type | Defined benefit, career average |
| Build-up rate | 1/49th of pensionable pay each year |
| Funded or unfunded | Funded, unlike most public-sector schemes |
| Worth transferring out? | Rarely |
| Main trap | Separate records from different councils |
Can you combine it?
This is a funded scheme, so a transfer out is legally possible. That is not the same as it being a good idea. You would be giving up a guaranteed, inflation-linked income for a pot whose value can fall, and for most members that trade is a poor one.
If safeguarded benefits are worth more than £30,000, you are required by law to take regulated advice from a pension transfer specialist before you can transfer. That is a legal requirement, not a suggestion, and the scheme you are leaving must check that you have taken it.
This is the question most people arrive with, so it is answered first rather than buried. Your old pots from other jobs are a different matter, and that is covered below.
How the pension builds up
The Local Government Pension Scheme (LGPS) is career average (care), defined benefit, and funded. Each year you build 1/49th of pensionable pay each year. The 50/50 section halves your contributions and builds pension at 1/98th instead.
Career average means each year is banked separately and then revalued. Your final salary does not set the whole pension, which is what changed from the older schemes.
For benefits built up from April 2014, normal pension age is your State Pension age, with a minimum of 65. Taking benefits before then reduces them permanently, because the scheme expects to pay you for longer.
What it costs you
Bands from April 2026. Your employer sets your rate each April based on your pay for that job.
| Pensionable pay | You pay |
|---|---|
| Up to £18,400 | 5.5% |
| £18,401 to £29,000 | 5.8% |
| £29,001 to £47,300 | 6.5% |
| £47,301 to £59,800 | 6.8% |
| £59,801 to £84,000 | 8.5% |
| £84,001 to £119,100 | 9.9% |
| £119,101 to £140,400 | 10.5% |
| £140,401 to £210,700 | 11.4% |
| £210,701 or more | 12.5% |
Contributions attract income tax relief, so the cost to your take-home pay is less than the headline percentage suggests. Your employer pays in alongside you.
The LGPS is funded, and that changes what you are allowed to do
The LGPS holds real assets in local pension funds. The NHS, Teachers', Police, Fire, Civil Service and Armed Forces schemes do not. They are paid from current taxation.
That single fact changes your options. Because the LGPS is funded, a transfer out to a personal pension is legally possible. In the unfunded schemes it is not permitted at all.
Possible is not the same as sensible. You would be giving up a guaranteed, inflation-linked income for a pot that can fall in value. For most members that is a poor trade, and above £30,000 of safeguarded benefits you must take regulated advice first.
The LGPS also offers a 50/50 section. You pay half the contributions and build pension at 1/98th instead of 1/49th, while keeping full life cover. It is designed for a squeeze on pay, not as a long-term setting.
What being funded is actually worth to you
A council officer on £32,000 builds £32,000 divided by 49 in a year, which is about £653 of annual pension. At that salary the contribution rate is 6.5%.
Because the LGPS holds real assets, a transfer value can be requested and a transfer out is legally possible. That option does not exist for NHS or Teachers' members.
Having the option is not a reason to use it. Giving up £653 a year of inflation-linked income, for life, in exchange for a lump sum is a trade that needs regulated advice.
If your safeguarded benefits exceed £30,000 you must take regulated advice from a pension transfer specialist before you can proceed.
That is a regulated question and we are not pension advisers. We introduce you to one who is. The introduction costs you nothing; we may be paid by that firm.
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What you would be giving up
These are the four things people lose sight of when a transfer value lands on the doormat.
Being allowed to transfer is not a reason to
The LGPS is the one scheme here where it is permitted. That makes the guarantee easier to give away by accident.
50/50 is a short-term setting
It halves your build-up to 1/98th a year. Left running for years it quietly costs a large share of your pension.
A transfer value flatters the pot
A six-figure transfer value looks bigger than a four-figure annual income. It is paying you to take on the risk the fund currently carries.
AVCs are separate money
In-house AVCs sit alongside your main benefits and are defined contribution. They follow different rules at retirement.
The pot stays invested
A combined pot remains invested, so its value can fall as well as rise. You may get back less than was transferred in, and that risk sits with you, not the scheme.
The pots that are worth reviewing
Most people who work for councils, schools, universities and admitted bodies also have older pots from earlier jobs. Those are the ones worth looking at. They are often small, forgotten, and sitting in expensive or poorly performing funds.
Combining those can cut charges and give you one place to look. It carries its own risks, covered above, and it needs advice from a firm authorised to give it.
Have other pots alongside your Local Government Pension Scheme (LGPS) pension?
Old workplace pots from previous jobs are a different question from your scheme pension. Those are often worth reviewing. We will introduce you to a firm that can advise on them.
The introduction costs you nothing; we may be paid by the firm we introduce you to. Mon to Sat, 9am to 8pm.
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Common questions
Can I combine my LGPS pension with my other pensions?
Legally yes, but for most members it is the wrong move. This is a funded scheme, so a transfer out is legally possible. That is not the same as it being a good idea. You would be giving up a guaranteed, inflation-linked income for a pot whose value can fall, and for most members that trade is a poor one.
Is the Local Government Pension Scheme (LGPS) a good pension?
It is career average (care), defined benefit, and funded. Your employer carries the investment risk, not you. Each year you build 1/49th of pensionable pay each year. That guarantee is the part people undervalue, because a pot with a number on it feels more real than an income promise.
What happens to my other old workplace pots?
Those are a separate question, and usually the more useful one. Pots from previous jobs can often be reviewed and sometimes combined. That is where we can introduce you to a firm that advises. Your LGPS scheme pension normally stays exactly where it is.
Do I have to take advice before transferring?
If safeguarded benefits are worth more than £30,000, you are required by law to take regulated advice from a pension transfer specialist before you can transfer. That is a legal requirement, not a suggestion, and the scheme you are leaving must check that you have taken it.
When can I take my LGPS pension?
The normal pension age for this scheme is Your State Pension age, with a minimum of 65. You can usually take benefits earlier, but they are reduced to reflect the longer period they will be paid for. Taking a scheme pension early is a permanent decision.
What does it cost me to be in the scheme?
Bands from April 2026. Your employer sets your rate each April based on your pay for that job.
Can I actually transfer my LGPS pension out?
Yes, legally, because the scheme is funded. That makes it different from the NHS or Teachers' schemes, where it is not allowed. Whether you should is a separate question, and one that needs a pension transfer specialist above £30,000.
What is the 50/50 section for?
It halves your contributions and halves your pension build-up, at 1/98th a year. Death in service cover stays at the full level. It exists so members under financial pressure stay in the scheme rather than opting out entirely.
Does That's Family Finance advise on my scheme pension?
No. We are authorised for protection only. We do not advise on pensions and we are not pension transfer specialists. We introduce you to a separately authorised firm that is. The introduction costs you nothing; we may be paid by the firm we introduce you to.
Several LGPS records from different councils?
Multiple employments in the LGPS often sit as separate records. Aggregating them is a regulated decision. Tell us what you hold and we will put you in front of a regulated pension adviser. If combining is the wrong move, they will tell you that.
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Sources and how to check
- LGPS members, new contribution bands 2026
- LGPS members, how your pension is worked out
- LGPS members, transferring your pension
- LGPS members, paying less (50/50 section)
Figures were checked in August 2026. Scheme rules and pay bands change, usually each April, so check the scheme’s own page before you act.
Pensions go to a separately authorised firm we have vetted. The introduction costs you nothing; we may be paid by the firm we introduce you to.