You pay contributions on all of your pensionable pay according to the amount you earn. The rate of contributions varies from 5.5% to 12.5% and is determined by your scheme employer based on your actual gross pensionable pay.
You can reduce the amount you pay by joining the 50/50 section of the scheme. In this case, you would only pay half the normal contributions and you would build up half the normal benefits.
Pay bands and contribution rates applicable from April 2018.
|Your pensionable pay||Your contribution rate
|Your contribution rate
|Up to £14,100||5.50%||2.75%|
|£14,101 to £22,000||5.80%||2.90%|
|£22,001 to £35,700||6.50%||3.25%|
|£35,701 to £45,200||6.80%||3.40%|
|£45,201 to £63,100||8.50%||4.25%|
|£63,101 to £89,400||9.90%||4.95%|
|£89,401 to £105,200||10.50%||5.25%|
|£105,201 to £157,800||11.40%||5.70%|
|£157,801 or more||12.50%||6.25%|
The 50/50 Section is designed to allow you to continue to build a pension for your retirement during periods of financial hardship.
Rather than opting out of the scheme altogether, you could opt to pay half contributions and build up pension at a rate of 1/98th of your pensionable pay (half the normal rate of 1/49th). You can opt into the 50/50 and back into the main section at any time and as often as you wish.
If you are in the 50/50 section, you will be automatically be moved into the main section:
- on your employer’s re-enrolment date (the date they have to enrol all workers into a pension scheme)
- if you are off sick and start to receive no pay
- if you are on child related leave and start to receive no pay.
If you are automatically moved into the main section on your employer’s re-enrolment date, you may opt back into the 50/50 section at any time. If you are on no pay sickness or child related leave, there is no benefit to being in the 50/50 section as you will not be paying contributions.
If you have to retire on Tier 1 or Tier 2 ill health, the additional pension awarded to your benefits will be calculated as if you were in the main section. Life cover is also unaffected and your dependents will not see a reduction in the benefits they receive after your death. See our What happens when you die page for further information.
However, if you are not interested in joining the 50/50 Section and would, instead, like to opt out of the Scheme completely, you can do so by providing your employer with a completed opt out form below.
Please note that opting out of the LGPS is a big decision to make that could adversely affect the benefits payable to you, or the benefits payable to your dependants in the event of your death. If you are considering opting out of the LGPS, we would highly recommend that you first seek independent financial advice before doing so.