When your personal circumstances change you may need to think about what you do with the money you’ve already put into your pension. This could be because you’ve started a job outside local government, or simply because you’ve chosen to opt out of the Local Government Pension Scheme.
If you are thinking about opting out, you should consider getting financial advice before doing so.
What are your options?
There are several options available to you if you leave the Local Government Pension Scheme.
If you have less than two years’ total membership, haven’t transferred anything into the Local Government Pension Scheme from elsewhere:
- You can get a refund - the amount needed to buy you back into the state second pension scheme (S2P) and any tax due will be taken off the refund you get.
- You can transfer the cash equivalent of your pension benefits into another pension - your new employer’s scheme, a personal pension plan, a stakeholder pension scheme, or a ‘buy-out’ insurance policy.
- You can wait until you re-join local government, and link the service.
If you’ve got more than two years’ total membership, have transferred funds into the Local Government Pension Scheme:
- You can leave your benefits in the scheme, and when you retire you’ll get a pension based on your total membership (and final pay) on the day you left the scheme. This is known as having deferred benefits, and the way they’ll be paid to you is explained on the page receiving your deferred pension.
- You can transfer the cash equivalent of your pension benefits into another pension - your new employer’s scheme, a personal pension plan, a stakeholder pension scheme, or a ‘buy-out’ insurance policy.
Getting advice
If you transfer your pension to another scheme it may not have the guarantees the Local Government Pension Scheme offers, so think carefully about making this decision - see the financial advice page.
More information
You can download A Guide to the Local Government Pension Scheme, with full details of all the features and how to take advantage of them, to print out and read when you want. If you would rather receive a copy by post, contact us.
If you’ve got further questions, visit the deferred member frequently asked questions page of this site.