How does 50/50 work?
The LGPS 50/50 option allows you to temporarily reduce your pension contributions while remaining a member of the LGPS.
You can return to the main section at any time, and you will also be automatically moved back into it in line with automatic enrolment rules.
Which option is right for me?
| Feature | Main Section | 50/50 | Opt Out |
|---|---|---|---|
| Member contributions | 100% | 50% | 0% |
| Pension build-up | 1/49 | 1/98 | ✗ |
| Death in service lump sum | ✓ Full | ✓ Full | ✗ |
| Ill health pension | ✓ | ✓ | ✗ |
| Employer contributions | ✓ | ✓ | ✗ |
| LGPS membership | ✓ | ✓ | ✗ |
Examples
The examples below show how the 50/50 option may affect pension contributions and benefits in different circumstances.
Example - Ellen
Ellen is repaying a loan and is finding things financially difficult, so she decides to elect to join the 50/50 section for the remainder of the loan period.
Her pensionable pay is £18,000 per year. Normally she would contribute 5.8% (£87 per month before tax relief) in the main section. While in the 50/50 section, she contributes half that amount, 2.9% (£43.50 per month before tax relief).
If Ellen remained in the 50/50 section for two years, she would build up an annual pension of £367. Although she pays lower contributions, her death in service lump sum remains at the full level of £54,000.
| Feature | Main Section | 50/50 |
|---|---|---|
| Net contribution | £70 per month | £35 per month |
| Pension built up | £367 per year (1/49) | £184 per year (1/98) |
| Death in service lump sum | £54,000 | £54,000 |
Example - Roger
Roger's partner has lost their job and the family is facing a difficult financial period. Roger decides to join the 50/50 section for 6 months.
His pensionable pay is £55,000 per year. During this period, he pays contributions at a rate of 3.4% instead of 6.8%.
After tax relief, this reduces his contributions by a total of £561 over the 6 months. His death in service lump sum remains at £165,000 throughout the period.
| Feature | Main Section | 50/50 |
|---|---|---|
| Period | 6 months | 6 months |
| Net contribution | £187 per month | £93.50 per month |
| Pension built up | £561 per year (1/49 × 0.5) | £281 per year (1/98 × 0.5) |
| Death in service lump sum | £165,000 | £165,000 |
When will I return to the main section of the scheme?
The LGPS 50/50 section is designed as a short-term option. You will normally return to the main section of the scheme if:
- you choose to do so;
- your employer automatically re-enrols you; or
- you move to no pay during a qualifying period of sickness or child-related leave.