Changes to the local government pension scheme

The Local Government pension is the only scheme to implement changes in April 2014.The existing scheme is final salary and has an accrual rate of 1/60th of final salary for people who joined after 31 March 2008, and 1/80th (for those joining before April 2008). The new career average scheme will accrue benefits at a rate of 1/49th of each year's pensionable earnings.

The normal pension age for the new scheme remains the same at 65 for the time being, although it will rise in line the state pension.

Although members' average contribution rate remains 6.5%, the average hides changes for those in different earnings bands. Those earning lower amounts – up to £21,000 a year – will contribute the same percentage or slightly less than before. Those earning more will face rises, with the highest earners – on more than £150,000 a year – will see their contributions soar up to 12.5%.

Despite these increases, the reforms will reduce the average value of pension benefits by more than one third from 22% to 14% of the scheme member's salary, according to Pensions Policy Institute figures.

For examples of how the forthcoming changes will affect individual members, visit

Your Comments

There is a major anomaly that discriminates against full time workers.
Because the member contributions are based on annual income for the job (not rate of pay per hour as at present) someone who does, for example, a full time job earning £60000 a year will pay a contribution of 8.5%.  However someone doing two part time jobs, each with an income of £30000 a year (total income £60000) will only pay 6.5% on each job.  The person doing two jobs will get a pension for 2% less than the person doing one job, even though the administration of two pensions must cost more than one pension. The anomaly continues at lower and higher rates of pay but at slightly different percentages.  There are a large number of people in local government and schools who do two, or more, part time jobs and this