Whether you’ve been in the Local Government Pension Scheme (LGPS) for a short time, or a number of years, understanding how we work out your pension can seem complicated.
Annual benefit statement
We provide you with an annual benefit statement each year to let you know how your pension is building. It’s important that you check your statements and let us know if you think something isn’t right. We load your pension statement to your My Pension Online account. If you’ve registered, you’ll get an email when a new statement is available.
Final Salary and CARE
Your annual benefit statement provides a breakdown of your membership. This is because the LGPS rules changed in 2008 and then again in 2014. There are 3 different parts:
- membership from 1 April 2014
- membership between 1 April 2008 and 31 March 2014
- membership up to 31 March 2008
Before 1 April 2014
This part of the scheme is known as Final Salary. In this section, you built up years and days of membership. We detail the years and days you've built up on your pension statement.
When you leave your job, we will work out the value of this pension membership using your final salary pay.
For membership before 1 April 2014, your pension and lump are worked out in the following ways:
Pension
If you have membership before 1 April 2014 your pension is worked out using your final salary pay (this is your average full time equivalent pay for your final 365 days of employment plus any relevant allowances). You get:
- 1/80 of your final salary for each year to 31 March 2008
- 1/60 for each year between 1 April 2008 and 31 March 2014.
If you were part-time, you’ll get a proportion of each year based on the amount you worked.
Lump sum
For each year to 31 March 2008 only, you get a lump sum of 3/80 of your final pay.
From 1 April 2014
For your membership from 1 April 2014 your pension is worked out based on 1/49 of your actual pay in each scheme year which runs from 1 April to 31 March. Each April, this is then revalued in line with the cost of living. This type of scheme is known as a Career Average Revalued Earnings or CARE scheme.
Examples
We’ve provided 3 different examples to help you understand how we work out each section of the scheme:
- example 1 – CARE membership only
- example 2 - CARE membership and Final Salary membership which began on or after 1 April 2008
- example 3 - CARE membership and Final Salary membership which began on or before 31 March 2008
Each example shows what pension and lump sum has been built up so far but when a member claims their pension, they’ll have the option to convert some of their pension into a one-off tax-free lump sum payment. You can find out more about lump sums and tax.
Example 1 - CARE membership only
An active member who has CARE membership only is someone who started their job on or after 1 April 2014.
In this example, the member is 35 years of age. They joined the LGPS when they started their full-time job as a Waste Disposal Administrator for the local council on 1 April 2016. As they joined after 1 April 2014, they only have membership in the CARE scheme.
Example 1 - CARE calculation
Year | Opening Balance | Member’s CARE Pensionable Pay | Member’s Pension (Pay x 1/49th) | Total before cost-of-living adjustment | Cost of living adjustment | Updated Total Account |
01/04/16 |
£0.00 |
£18,625.00 |
£380.10 |
£380.10 |
1% = £3.80 |
£383.90 |
01/04/17 |
£383.90 |
£18,904.00 |
£385.80 |
£769.70 |
3% = £23.09 |
£792.79 |
01/04/18 |
£792.79 |
£19,302.00 |
£393.92 |
£1,186.71 |
2.4% = £28.48 |
£1,215.19 |
01/04/19 |
£1,215.19 |
£19,690.00 |
£401.84 |
£1,617.03 |
1.7% = £27.49 |
£1,644.52 |
01/04/20 |
£1,644.52 |
£20,600.00 |
£420.41 |
£2,064.93 |
0.5% = £10.32 |
£2,075.25 |
01/04/21 |
£2,075.25 |
£21,529.00 |
£439.37 |
£2,514.62 |
3.1% = £77.95 |
£2,592.57 |
01/04/22 |
£2,592.57 |
£23,480.00 |
£479.18 |
£3,071.75 |
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If they remain in the scheme, the member will continue to build up membership in this way based on the pensionable pay they receive and the cost-of-living adjustment.
The total value of their annual pension that had built up to 1 April 2023 was £3,071.75.
Example 2 - CARE membership and Final Salary 1/60th
An active member who has CARE membership and final salary 60ths is someone who started their job on or after 1 April 2008.
In this example, the member is 49 years of age and joined the LGPS on 1 September 2011 when they started their job as a Catering Supervisor at a local school. They work part-time, and their working hours are half of full-time. As they joined the scheme in 2011, their membership is in the post 2008 final salary scheme and the CARE scheme.
Example 2 - CARE calculation
Scheme Year | Opening Balance | Member's CARE Pensionable Pay | Member’s Pension (Pay x 1/49th) | Total before cost-of-living adjustment | Cost of living adjustment | Updated Total Account |
01/04/14 |
£0.00 |
£7,169.87 |
£146.32 |
£146.32 |
1.2% = £1.76 |
£148.08 |
01/04/15 |
£148.08 |
£7,364.00 |
£150.29 |
£298.37 |
-0.1% = £-0.30 |
£298.07 |
01/04/16 |
£298.07 |
£7,590.20 |
£154.90 |
£452.97 |
1% = £4.53 |
£457.50 |
01/04/17 |
£457.50 |
£7,902.46 |
£161.27 |
£618.77 |
3% = £18.56 |
£637.33 |
01/04/18 |
£637.33 |
£8,240.00 |
£168.16 |
£805.49 |
2.4% = £19.33 |
£824.82 |
01/04/19 |
£824.82 |
£8,565.00 |
£174.80 |
£999.62 |
1.7% = £16.99 |
£1,016.61 |
01/04/20 |
£1,016.61 |
£8,793.23 |
£179.45 |
£1,196.06 |
0.5% = £5.98 |
£1,202.04 |
01/04/21 |
£1,202.04 |
£8,825.82 |
£180.12 |
£1,382.16 |
3.1% = £42.85 |
£1,425.01 |
01/04/22 |
£1,425.01 |
£9,025.50 |
£184.19 |
£1,609.20 |
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The member’s CARE pension that they had built up to 1st April 2023 was £1,609.20.
Final salary calculation
For their membership between 1 September 2011 and 31 March 2014 this member had built up 1 year and 106 days 1/60ths membership in this part of the scheme and had a full time equivalent final pensionable pay of £18,051.00.
Service x Final Salary x 1/60 = Annual Pension
1 Year 106 days (1.2904) x 18051 x 1/60 = £388.22
Member’s total annual pension = £1,609.20 + £388.22 = £1,997.42
Example 3 - CARE membership, final salary 60ths and final salary 80ths
An active member who has CARE membership, final salary 60ths and final salary 80ths is someone who started their job before 31 March 2008.
This member is 60 years of age and joined the LGPS on 1 April 1988 when they started their full-time job as a Junior Payroll Clerk for the County Fire and Rescue Service. They worked their way up to be a Payroll Manager and is starting to plan their retirement. Their current pay is £27,685 per annum.
This member has membership of all 3 sections of the scheme, including both sections of the final salary scheme.
Example 3 - CARE calculation
Scheme Year | Opening Balance | Member’s CARE Pensionable Pay | Member’s pension (Pay x 1/49th) | Total before cost-of-living adjustment | Cost of living adjustment | Updated Total Account |
01/04/14 |
£0.00 |
£21,792.52 |
£444.75 |
£444.75 |
1.2% = £5.34 |
£450.09 |
01/04/15 |
£450.09 |
£22,270.65 |
£454.50 |
£904.59 |
-0.1% = £-0.90 |
£903.69 |
01/04/16 |
£903.69 |
£23,069.45 |
£470.81 |
£1,374.50 |
1% = £13.75 |
£1,388.25 |
01/04/17 |
£1,388.25 |
£23,547.60 |
£480.56 |
£1,868.81 |
3% = £56.06 |
£1,924.87 |
01/04/18 |
£1,924.87 |
£23,975.16 |
£489.29 |
£2,414.16 |
2.4% = £57.94 |
£2,472.10 |
01/04/19 |
£2,472.10 |
£24,455.87 |
£499.10 |
£2,971.20 |
1.7% = £50.51 |
£3,021.71 |
01/04/20 |
£3,021.71 |
£25,194.78 |
£514.18 |
£3,535.89 |
0.5% = £17.68 |
£3,553.57 |
01/04/21 |
£3,553.57 |
£26,500.92 |
£540.84 |
£4,094.41 |
3.1% = £126.93 |
£4,221.34 |
01/04/22 |
£4,221.34 |
£27,685.00 |
£565.00 |
£4,786.34 |
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Their CARE pension that they had built up to 1 April 2023 was £4,786.34.
Final Salary Calculation
This member had built up 20 years 1/80ths and 6 years 1/60ths membership in this part of the scheme and had a final pensionable pay of £27,685.00.
Service x Final Salary x 1/80 = Annual Pension
20 years (20) x 27685 x 1/80 = £6,921.25
Service x Final Salary x 3/80 = Automatic Lump Sum
20 years (20) x 27685 x 3/80 = £20,763.75
Service x Final Salary x 1/60 = Annual Pension
6 years (6) x 27685 x 1/60 = £2,768.50
Member’s Total Annual Pension = £4,786.34 + £6,921.25 + £2,768.50 = £14,476.09
Member’s Total Lump Sum = £20,763.75
More information
The national LGPS member website has more information about how your pension is worked out.
Video: How your pension works
This video explains how your pension accounts work and what you’ll get paid. If you leave the LGPS before you take your pension, you’ll either become a deferred member, or be offered a transfer or refund. For subtitles select ‘CC’ (closed captions).