How much will you contribute?
| If your actual pensionable pay is: | Your contribution rate: |
|---|---|
| Up to £18,400 | 5.5% |
| £18,401 to £29,000 | 5.8% |
| £29,001 to £47,300 | 6.5% |
| £47,301 to £59,800 | 6.8% |
| £59,801 to £84,000 | 8.5% |
| £84,001 to £119,100 | 9.9% |
| £119,101 to £140,400 | 10.5% |
| £140,401 to £210,700 | 11.4% |
| £210,701 or more | 12.5% |
Does my employer contribute too?
Yes.
In addition to your own contributions, your employer pays contributions towards the cost of providing LGPS benefits. You can see your employer's contribution amount on your monthly payslip.
This contribution rate is reviewed every three years by the Scheme Actuary.
How does tax relief work?
Your LGPS contributions are deducted from your pay before income tax is calculated. This means that most members who pay tax benefit from tax relief on their pension contributions.
In simple terms, contributing to your pension costs you less than it appears because your tax bill is reduced.
For example:
- If you are a basic-rate taxpayer, for every £100 paid into the LGPS, you will save £20 in tax.
- If you are a higher-rate taxpayer, for every £100 paid into the LGPS, you will save £40 in tax.
Low Earner's Pension Payment
HMRC is contacting eligible LGPS members about a new payment for some low earners who missed out on pension tax relief.
You may be eligible if you:
- paid LGPS contributions from 2024/25 onwards, and
- did not receive pension tax relief because you paid no Income Tax.
How will HMRC contact me?
HMRC will contact eligible members either by letter or through their Personal Tax Account.
Why is this payment being made?
The payment is designed to help low earners who did not benefit from pension tax relief because the LGPS uses a net pay arrangement.