Pensions Awareness Sessions 2026

You can currently choose to take your LGPS pension from age 55. The normal minimum pension age is due to rise from 55 to 57 in April 2028. If you take your pension before your Normal Pension Age, it is normally reduced because it is being paid for longer.

The 1/49th formula is used to build up pension each year in the CARE section of the LGPS. It does not assume that you retire at a particular age. Each year, 1/49th of your pensionable pay is added to your pension account. When you take your pension, reductions or increases may then apply depending on whether you take it before, at or after your Normal Pension Age.

For CARE benefits built up from 1 April 2014, your Normal Pension Age is linked to your State Pension age, with a minimum of age 65. For final salary benefits built up before April 2014, the normal pension age is usually 65, although some members may have protections that affect when benefits can be paid without reduction.

Yes. If you leave your job before Normal Pension Age and do not take your pension straight away, your benefits normally become deferred benefits. They remain in the LGPS and are increased each year in line with cost-of-living increases. You can then choose when to claim them, subject to scheme rules.

Yes, early retirement reductions are normally based on the exact period in days, between the date you take your pension and your Normal Pension Age. If you retire part-way between the published year bands, the reduction is calculated proportionately.

The 85-year rule is a protection that may apply to some members who were in the LGPS before 1 October 2006. Broadly, it looks at your age plus your LGPS membership, and if these add up to 85 or more, some or all of your benefits may be protected from early retirement reductions. 

If you were a member of the LGPS between 1 April 1998 and 30 September 2006, and your age and membership add up to 85 or more you may have some level of protection from the 85-year rule.  It does not usually apply to all benefits. Online calculators include the 85-year rule protections, if you qualify. 

Some older protections may apply to benefits built up before scheme changes, but this depends on your individual membership history and dates. It is not a general rule for all members. Please contact the team for more information.

If you take your LGPS pension after Normal Pension Age, it is normally increased because it is being paid later. The exact increase is calculated using actuarial factors set for the scheme, so it is best shown in an individual retirement estimate.

Yes. The calculation is tailored to you and will show you the maximum which you can take as tax-free cash.

Yes.

No, your LGPS lump sum and annual pension are paid as part of the same retirement benefits package and must be taken at the same time. You cannot take the main scheme lump sum separately in advance of the pension.

No, your tax-free lump sum is paid free of tax. However, pension income is taxable. Tax depends on your personal circumstances, so members should contact HMRC or seek regulated financial advice if they are unsure.

The LGPS uses a set commutation rate under the scheme rules. This means that for every £1 of annual pension you give up, you receive £12 of lump sum. Other pension schemes may use different rates because their rules and funding arrangements are different.

Scheme rules can change, but there is no guarantee that the commutation rate will change. Any change would be made at a national level, not by an individual fund.

Additional Voluntary Contributions, or AVCs, build up a separate investment pot alongside your LGPS pension. The value depends on how much you pay in and how the investments perform. Additional Pension Contributions, or APCs, buy a set amount of extra LGPS pension. AVCs are more like an investment account; APCs add extra defined benefit pension.

Yes. Members can usually pay both AVCs and APCs, subject to scheme rules, tax limits and affordability.

There is no single answer. APCs buy a known amount of extra pension, while AVCs depend on investment performance and the options available at retirement. AVCs may be attractive where a member hopes to take the pot as tax-free cash alongside the LGPS pension, but this depends on HMRC limits and the member’s overall benefits. APCs may be attractive when a member wants to buy a guaranteed amount of pension.  Members should consider independent financial advice.

AVCs are extra contributions paid into a separate pension pot. For Oxfordshire Pension Fund members, AVCs are invested through the fund’s provider Legal and General. At retirement, the pot can usually be used in several ways, such as taking tax-free cash within limits, buying an annuity, or buying extra LGPS pension if the rules allow.

AVCs can grow over time because they are invested, but investment values can go down as well as up. The final value depends on contributions paid, investment returns, charges and market conditions.

In-house AVCs are linked to your LGPS benefits and must be taken when you take your main LGPS pension.

The AVC tax-free cash is included when checking the overall HMRC tax-free lump sum limit. If your AVC pot uses up some or all of the available tax-free allowance, it may reduce the amount of main scheme pension you can give up for extra lump sum.

Most AVC pots were moved from Prudential to Legal & General in 2023 / 2024.  If you still have one of the older Prudential AVCs you may have different terms and options, so members should ask Prudential for details of their own policy.

For AVCs, you can generally save up to 100% of your taxable pay, subject to HMRC limits. For APCs, the LGPS sets a maximum amount of extra annual pension that can be bought. The exact maximum changes over time, so members should check the current limit before applying.

No. Standard APCs are paid by the member. Employers can choose to offer Shared Cost APCs, but this depends on employer policy and is not automatic.

No. If you reduce your hours, your LGPS contributions are based on your actual pensionable pay. You may be able to consider APCs or AVCs to increase your pension.

Your contributions are not paid into an individual pot in the same way as a savings account. The LGPS is a defined benefit scheme, so your pension is based on scheme rules rather than the exact contributions you personally pay. Your employer also contributes to the cost of providing the benefits. The pension added is an amount that will be paid to you annually until you die, not just once.