LGPS Interactive Pension Simulator

An Active member is currently working in a role that is part of the LGPS and is actively paying contributions. A Deferred member has left their LGPS role but has not yet retired. Their pension is 'preserved' and continues to increase with inflation each year until they decide to draw it. This calculator can project retirement figures for both types of members.

Additional Voluntary Contributions (AVCs) are the most common way to increase your retirement benefits. Think of it as a separate savings pot that sits alongside your main LGPS pension.

How is it different from my main pension?
Your main LGPS pension is a 'Defined Benefit' scheme, which guarantees you a specific, inflation-proofed income for life. Your AVC pot is a 'Defined Contribution' pot; its final value depends on how much you contribute and the investment growth it achieves over time.

What are the main benefits?

• Tax Relief: You get tax relief on your contributions. For a basic rate taxpayer, every £80 you contribute from your take-home pay is topped up to £100 in your AVC pot by the government.
• Flexible Retirement Options: When you retire, you have several options for your AVC pot, the most popular of which is to take the entire pot as a tax-free lump sum (subject to overall HMRC limits). You can also use it to buy a guaranteed income (an annuity) or transfer it to another pension.

How do I start an AVC?
You need to contact your own LGPS pension fund administrator (e.g., your county council or pension partnership). They will have an official 'in-house' AVC provider that you can pay into directly from your salary.

There are two main ways to get a lump sum from your main LGPS pension:

• Automatic Lump Sum (Pre-2008 Service): If you were a member before 1 April 2008, you have an automatic tax-free lump sum based on your service up to that date. This calculator has a dedicated input field for this.
• Commutation (Giving up pension): You can choose to give up some of your annual pension in exchange for a tax-free lump sum. For every £1 of annual pension you give up, you get £12 of tax-free cash. The "Lump Sum Planning Tools" on this page let you model this trade-off.

A third way is to take your separate AVC pot (see above) as a tax-free lump sum.

The Rule of 85 is a 'long-service' protection for members who joined the LGPS before 1 April 2008. Normally, retiring before your Normal Pension Age results in a reduction, but this rule can remove it. You meet the rule if your Age + Years of Scheme Membership (in whole years) adds up to 85 or more. If you meet the rule, you can receive some or all of your pension benefits from age 60 without the usual penalties.

The 50/50 section is a flexible option to help during times of financial pressure. When you opt in, you pay half your normal contributions and in return, you build up half the normal pension for that period. Importantly, you retain full life and ill-health cover. Our "Work-Life Balance Modeller" allows you to see the exact financial impact of using this option for specific periods of your career.

A Salary Sacrifice or Shared Cost AVC (SC-AVC) is the most efficient way to save. While a normal AVC contribution is taken from your pay after National Insurance (NI) is deducted, a Salary Sacrifice contribution is taken before both tax and NI.

This means you save on Tax **and** National Insurance, reducing the net cost of your contribution significantly.

Example of the difference:

• Standard AVC: A £100 contribution saves you £20 in tax (at the basic rate). The net cost to you is £80.
• Salary Sacrifice AVC: A £100 contribution saves you £20 in tax AND ~£8 in National Insurance. The net cost to you is only £72.

If you are also repaying a Student Loan, you could save on those repayments too, making the net cost even lower. You must check with your specific LGPS fund or employer to see if they offer a Salary Sacrifice scheme and to get a precise illustration.

Your contribution rate is not a flat rate; it's tiered based on your annual pensionable pay. The more you earn, the higher the percentage you contribute. Pension contributions also receive tax relief. This means if you are a basic rate (20%) taxpayer, for every £100 that goes into your pension, it only costs you £80 from your take-home pay because the government effectively pays the other £20.

These are the most powerful levers in your projection. For inflation (CPI), the Bank of England's long-term target is 2.0%, which is a sensible default. For pay rises, consider your career path. If you expect promotions, you might use a higher figure (e.g., 3-4%). If you expect to stay in the same role, an assumption closer to the inflation rate (e.g., 2.5%) might be more realistic. Try different figures to see how sensitive your projection is to these changes.

This is a powerful modelling tool designed to provide a very good estimate of your future benefits based on the assumptions you enter. However, it is for informational and educational purposes only and is not an official pension quotation. It does not account for all possible individual circumstances (like transfers in, divorce, or specific protections). Before making any financial decisions, you must contact your LGPS pension fund administrator for a formal retirement quotation.

Additional Pension Contributions (APCs) are a way to buy extra, guaranteed, inflation-proofed pension that is added to your main LGPS pension. Unlike an AVC pot which is an investment, an APC buys you a set amount of extra annual income for life.

You can choose to buy a specific amount of extra pension (up to a limit) and pay for it either with a lump sum or through regular deductions from your salary over a period of time.

Why choose APCs? It's a great option if you want certainty and a guaranteed outcome, as the extra pension you buy is protected against inflation just like your main scheme benefits.

Our "APC Modeller" shows you the powerful impact this can have on your final pension projection. To get a formal quote for the cost of buying APCs, you must contact your LGPS fund.