Your pension from 1 April 2014
1/49th of your pensionable pay is put into your pension account every year. If your pay has been reduced for reasons, like sickness or parental leave, assumed pensionable pay is used instead. This makes your pensionable pay equal to what you would have had if your pay hadn’t been reduced. We adjust the balance in your pension in the following April in line with the cost of living. If you’ve more than one pensionable job, you’ll have a separate pension for each one.
Let’s look at the pension of a member who joined the LGPS on 1 April 2020. The member had pensionable pay of £24,500 in the first year and a pay rise of 1% in the next two years.
Pension account – an example
| Scheme year | Opening balance | Build up in Scheme year (pay ÷ build up rate = pension) | Total account 31 March | Cost of living change | Total pension |
|---|---|---|---|---|---|
| 2020-21 | £0.00 | £24,500 ÷ 49 = £500.00 | £500.00 | 1.2% | £506.00 |
| 2021-22 | £506.00 | £24,745 ÷ 49 = £505.00 | £1,011.00 | -0.1% | £1,009.99 |
| 2022-23 | £1,009.99 | £24,992.45 ÷ 49 = £510.05 | £1,520.04 | 1% | £1,535.24 |
The member’s pension account will continue to build up in the same way every year.
Buying extra pension
If you’re buying extra pension by paying additional pension contributions or shared cost additional pension contributions, the amount you buy in each year is added to your pension account.
50/50 section
If you join the 50/50 section of the LGPS, you’d pay half your normal contributions for half the pension build-up. Each year you’re in the 50/50 section 1/98th of your pay is put into your pension instead of 1/49th. See the ‘Paying less‘ section for more information about the 50/50 section.
