You might be thinking of opting out of the pension scheme for a variety of reasons. Whatever the reason, it’s worth spending five minutes reading this to find out what you would be giving up – it could save you a fortune later.

Things to think about before you opt out

  • It costs less than you might think to be in the LGPS. If you pay tax you get tax relief on your contributions. Opting out would mean you would pay more tax.
  • The LGPS is one of the best occupational pension schemes in the UK and as a member you enjoy all the benefits listed below.
  • If you opt out of the scheme with an entitlement to deferred benefits, you will not be able to combine those deferred benefits with any future period of membership. This will mean that, should you later re-join, the separate deferred benefits would not automatically become payable when you draw the benefits for the new period of membership. Please see the deferred factsheet on our website setting out when deferred benefits can become payable and the circumstances whereby we would reduce them for early payment
  • Have you considered the 50/50 option instead? The 50/50 option allows you to pay half your current contribution rate but build up half the pension. However, you retain full life assurance cover. If you would like to take this option please complete the '50/50 Contribution Flexiblity Form'. see link below

50/50 Contribution Flexibility Form

The benefits of staying in the pension scheme

  • A guaranteed index-linked pension, payable for life, based on your pay and how long you’re a member.
  • You can take a tax free lump sum when you retire.
  • Lump-sum death grant of three times your pay if you die, paid to the people you choose.
  • Pension for your husband, wife, civil partner or your cohabiting partner (provided your relationship met certain conditions at death)
  • Pension if you become too ill to work.
  • Flexibility to draw your benefits between 55 and 75.
  • Early retirement if you're age 55 or over and made redundant.
  • Tax relief on your contributions.
  • Schemes to help you get even bigger benefits by paying extra.

Your employer contributes too

Your employer pays money into your pension too and this alone could be worth up to twice the amount that you pay into it.

It's up to you now

You could, of course, just depend on the state pension, but will this be enough to give you the standard of living you expect when you retire? Contributing to the LGPS is one way to protect yourself against financial worries in old age. Whatever your position, you need to think about your options now. We all need to make choices at different times during our lives, and our choices can have a real effect on our future. So it's worth investing some time now to make sure you make the best choice for you.

If you still really want to opt out of the LGPS please print and complete the opt out form below. For LCC LGPS members, there is an Electronic Opt Out Form and the link is at the bottom of the page. This currently is only for use of LCC LGPS members to opt out. All paper forms should be returned to your Employer and as mentioned LCC will soon be excluded from this paper process due to the new development of our Electronic Opt Out Form.

 Anyone who opts out or stops making payments will be automatically enrolled back into a pension scheme at a later date (usually every three years).  Please do not sign the opt out form before the start date of your scheme membership.