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Types of retirement
If you have three or more months’ membership in the Local Government Pension Scheme (LGPS Councillor), you will receive an LGPS Councillor pension when you retire, payable for life.
The table below shows the different types of retirement from LGPS Councillor.
Please note: The table mentions the current minimum retirement age of 55. (In LGPS Councillor, special terms apply that mean you may be able to start receiving pension from age 50).
The UK Government has announced that the earliest age you can take your pension will increase from age 55 to 57 with effect from 6th April 2028. This does not apply if you have to take your pension early due to ill health.
You could be protected from this increase if you joined the LGPS in England and Wales before 4th November 2021. However, you will only be able to use this protection when you take your LGPS pension, if the LGPS rules allow you to take your pension before age 57.
The UK Government makes the LGPS rules. It has not yet confirmed if it will allow members who qualify for protection to take their LGPS pension before age 57, from 6th April 2028.
| Normal retirement | Your normal retirement age is 65.
If you start to take your pension at your normal retirement age, you will receive the full amount with no reductions. |
|---|---|
| Early retirement (Consent needed) | If you stop being a councillor between ages 50 and 55, you may be able to receive your pension straight away, as long as your council agrees.
The pension will be reduced because you are taking it early. The earlier you go, the lower your pension will be. Your retirement pack will give you the details. If your council agrees to pay your benefits before age 55, there may be a tax charge on your pension benefits. |
| Early retirement (No consent needed) | If you stop being a councillor between ages 55 and 65, you can receive your pension straight away. You do not need your council’s consent.
The pension will be reduced because you are taking it early. The earlier you go, the lower your pension will be. Your retirement pack will give you the details. You don’t have to take the pension if you do not want to. You can choose to defer the pension for now and receive it in the future. |
| Late retirement | If you stop being a councillor after age 65, you can receive your pension straight away. The pension will be slightly higher because you are taking it later than expected. The later you go, the higher the pension will be.
If you continue to be a councillor beyond your 75th birthday, you must stop paying LGPS Councillor contributions and start receiving your pension. |
| Ill health retirement | If you step down as a councillor because of ill health, you might receive your pension straight away.
Your council will ask an independent doctor to confirm that, due to ill health, you are unable to do your current role permanently, or at least until you reach age 65. The doctor must be qualified in occupational health medicine and new to your case. If you retire due to ill health, your pension and lump sum will not be reduced, even if you are taking it early. You may also receive an enhancement, in the form of extra service, to give you a higher pension and lump sum: Membership you have built up on your own and the extra service enhancement you would receive
Your extra service will be limited so it doesn’t increase your membership to more than you would have built up if you had continued as a councillor until age 65. Your pension will not be enhanced if you have previously been awarded an ill health pension in LGPS. If, at the date of your ill health retirement, you have a life expectancy of less than one year, we may turn your pension into a one-off lump sum of five times the amount of your annual pension value. |
If you opt out of paying contributions but remain a councillor past retirement age, you cannot receive your pension straight away. You have to stop being a councillor, or reach age 75 if earlier, to receive your pension.
If you retire early, your benefits are reduced by a percentage for each year before normal retirement age:
| Number of Years Paid Early | Reduction to Annual Pension | Reduction to Automatic Lump Sum |
|---|---|---|
| 0 | 0% | 0% |
| 1 | 4.9% | 1.7% |
| 2 | 9.3% | 3.3% |
| 3 | 13.5% | 4.9% |
| 4 | 17.4% | 6.5% |
| 5 | 20.9% | 8.1% |
| 6 | 24.3% | 9.6% |
| 7 | 27.4% | 11.1% |
| 8 | 30.3% | 12.6% |
| 9 | 33.0% | 14.1% |
| 10 | 35.6% | 15.5% |
Rule of 85: If you qualify for the Rule of 85 and retire early, some of your pension will not be reduced.
You only qualify for the Rule of 85 if you were paying pension contributions into LGPS Councillor before 1st October 2006. You meet the Rule of 85 if:
| Your age when you take your LGPS Councillor benefits + The number of years you have paid pension contributions into LGPS Councillor for = 85 or more |
|---|
If you meet the Rule of 85, it will automatically apply if you start your pension from age 60.
If you meet the Rule of 85 and want to take your pension before age 60, you need your council’s consent for it to apply. If your council does not consent, you can still take your pension but it will be lower than if the Rule of 85 had applied.
The Rule of 85 works in this way:
| Birth Date | Pension built up on or before 31st March 2008 | Pension built up between 1st April 2008 and 31st March 2016 | Pension built up between 1st April 2016 and 31st March 2020 | Pension built up on or after 1st April 2020 |
|---|---|---|---|---|
| Between 1st April 1956 and 31st March 1960 | Unreduced | Tapered: that is, partially reduced on a sliding scale | Tapered | Fully reduced |
| On or after 1st April 1960 | Unreduced | Fully reduced | Fully reduced | Fully reduced |