Taking your pension early or late

Could my pension be reduced?

Your pension is likely to be reduced if you choose to retire before your normal pension age (NPA). The reduction will depend on how early you retire, please see the table below for details.

If you have membership of the LGPS before 2014 we will look at each part of your pension separately;

  • Membership before 1 April 2008
  • Membership between 1 April 2008 and 31 March 2014
  • Membership from 1 April 2014

and work out how many years early you are taking that part of your pension. Then we will use the appropriate reduction rate from the Pension reduction table below for each relevant part of your pension.

Pension reduction table

Note: these percentages are subject to change in the future.

The table below shows the maximum reductions that would apply to your pension and any automatic lump sum, depending on how many years before your NPA you take your pension.

If, for example, you take your pension between 1 and 2 years early, then the reduction will be between 4.9% and 9.3%.

Years early Reduction rate Lump sum reduction
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%
11 39.5% N/A
12 41.8% N/A
13 43.9% N/A
Protected pensions

There have been many changes in the LGPS over the years. One change is that the age from which members can receive their full pension has increased. Some of your pension may be protected if you were paying into the LGPS when any of the changes happened.

LGPS 2014 protections

Any pension you have earned up to 31 March 2014 will not be reduced if you retire from age 65, even if your normal LGPS pension age is later.

If you were born before 1 April 1957 and were paying into the LGPS on 1 April 2012 your pension may be protected by the Underpin (which aims to ensure that you will get a pension at least equal to that which you would have received if the scheme had not changed on 1 April 2014.) See: The Underpin.

If you were in the LGPS before 1 October 2006

If you paid into the LGPS before 1 October 2006, your pension may be protected under the 85-year rule.

You satisfy the 85-year rule if:

  • you have reached age 60 and,
  • your age when your pension is paid and the calendar length of your membership (each in whole years) add up to 85 or more.

The 85-year rule can be complex, but this leaflet should help you work out your general position. See: Transitional protections 85 year rule

Late payment

Your pension must be paid by your 75th birthday, even if you continue to work.

Your pension benefits will be increased if they are taken after the following normal pension ages (NPA):

  • Age 65, for service before 1 April 2014
  • State pension age or age 65 (whichever is highest), for service from 1 April 2014

The Government Actuary's Department (GAD) sets the late retirement increase factors and these are subject to change in the future.

A separate calculation is carried out for service before 1 April 2014 and for service from 1 April 2014 as there may be different increases or reductions on each.

For example, a member who retires between age 65 and state pension age may have a late retirement increase on their service before 1 April 2014 and a reduction for early payment on their service from 1 April 2014.

If you reach your NPA on or after 1 September 2023

The table below shows the increases that will apply to your pension and any automatic lump sum, for each day from your NPA.

For example, a person who works for 2 years after their NPA will have an increase of 0.0098% for the first year and then an increase of 0.0107% during the second year.

Years late Pension increase (%) Retirement grant increase (%) 
1 0.0098% 0.0000%
2 0.0107% 0.0000%
3 0.0117% 0.0000%
4 0.0129% 0.0000%
5 0.0141% 0.0000%
6 0.0156% 0.0000%
7 0.0171% 0.0000%
8 0.0189% 0.0000%
9 0.0208% 0.0000%
10 0.0230% 0.0000%

Example

Chris started work on 1 April 2014 so he has no automatic lump sum.

His NPA is 29 October 2023 and he retires on 31 March 2024. This is 154 days "late" (period from 29 October 2023 to 31 March 2024 inclusive).

His annual pension is £2,200.

So, his pension will be increased by:

£2,200 x 154 x 0.0098% = £2,200 x 154 x 0.0098 / 100 = £33.20

His total pension = £2,200 + £33.20 = £2,233.20 per year

Note: If you claim your benefits after 31 August 2023 but you reach your NPA before 1 September 2023 then:

  • a previous factor table will be used to calculate the late retirement increase from your NPA to 31 August 2023
  • the above table will be used to calculate the late retirement increase from 1 September 2023 to your retirement date.
What to do if you are retiring

For active members see: Retiring

For deferred members see: Claim your pension