Increasing your benefits

Overview

There are a number of ways you can provide extra benefits, on top of the benefits you are already looking forward to as a member of the LGPS.

For more information, see Contribution flexibility.

Please note the Pensions Section is not authorised under the Financial Services Act to give scheme members individual advice.

If you wish to receive individual and independent advice you may wish to talk to a registered independent financial adviser. You will personally need to meet the cost of any charges made for the advice.

Ways improve your retirement benefits

You can improve your retirement benefits by:

You can combine any of these options.

You can obtain information on a wide range of financial topics, including how to go about finding a financial adviser, from the Financial Conduct Authority (FCA). This is an independent organisation responsible for regulating financial services in the UK.

If you have any queries or require further information on any of the options, please contact us. We are unable to offer financial advice, but we can discuss your options with you. You may wish to seek independent financial advice before making your decision.

Buying extra pension (APCs)

You can buy extra pension by paying Additional Pension Contributions (APCs) regularly, over a period of time, or you can buy extra pension by paying in a one-off lump sum. You will need to undergo a medical assessment at your own expense if you choose to buy APCs by paying regularly.

The option to buy extra pension with APCs is only available to you whilst you are part of the Main Section of the Scheme. If you are paying reduced contributions in the 50/50 Section, you are unable to buy extra pension by paying APCs.

The maximum amount of additional pension you can buy from 1 April 2024 is £8,344 (this figure will increase each year in line with the cost of living). The amount it costs depends on how much extra pension you want to buy, the age you start paying the extra contributions and the length of time you want to pay them for.

You can only buy extra pension for yourself and not for additional dependants' benefits.

Any extra pension bought will come into payment at the same time as your other benefits from the Fund. However, they may be reduced for early payment if you choose to have your benefits paid before your normal pension age, or you are retired on the grounds of redundancy or business efficiency before your normal pension age.

You can obtain a quote to buy extra pension at the LGPS Member website. The online calculator will allow you to look at the cost of buying varying amounts of extra pension and the payment methods available to you. Please use this facility to calculate costs only. 

Do not send us any of the documents produced during your calculations.  

You can contact the Pensions Office for further information on paying APCs and our current medical fees.

Application to buy extra pension

Additional pension contributions deducted from pay

Please note that you cannot pay by this method if you are within 12 months of your normal pensionable age. Your only option is to pay by lump sum. If you are unsure of your normal pensionable age, you can use the State Pension Calculator at GOV.UK: Check your state pension age to check.

To make your application:

  • complete the APCs application form and send it to the Pensions Office with your birth certificate (we will accept a photocopy)

On receipt of your application we will send you a medical questionnaire for completion and return to the Fund's medical officer. The cost of this medical review must be paid by you when you submit the medical questionnaire.

Payment by lump sum

To make your application:

Bank name: Lloyds Bank

Branch: South Shields

Sort Code: 30 97 89  

Account Number: 35572568

 

As the full cost is payable immediately, you do not need to complete a medical questionnaire.

Shared cost APCs

Shared cost APCs cover the amount of pension "lost" during periods of unpaid additional Maternity, Adoption and Paternity leave or periods of unpaid authorised leave of absence.

Shared cost means that if you want to cover such a period, the cost of buying the "lost" pension is shared between you and your employer, with your employer meeting 2/3rds of the cost (provided you make an election to buy the "lost" pension within 30 days of returning to work).

Shared cost APCs can be a one off lump sum or regular amount over a period of time.  You will need to undergo a medical assessment at your own expense if you choose to buy Shared Cost APCs by paying regularly.

Before you can use the online calculator you must obtain a written statement from your employer showing the amount of pensionable pay lost during your absence. You can then calculate a quote and print off an application form to buy lost pension at the LGPS Member website. Send the application to your employer and they will check the details and send it to the Pensions Office. 

You can also contact the Pensions Office for further information on paying Shared Cost APCs and our current medical fees if you choose to pay by regular contributions.

Paying in-house AVCs

You can paying Additional Voluntary Contributions (AVCs) arranged through the LGPS (in-house AVCs).

All local government pension funds have an AVC arrangement in which you can invest money, deducted directly from your pay, through an AVC provider. 

Our current AVC provider is the Prudential.

If you choose to pay AVCs under the LGPS, the AVCs are invested separately in funds managed by our AVC provider.

You have your own personal account that, over time, builds up with your contributions and the returns on your investment, and will be available to you when you retire. You can often choose which investment route you prefer.

For more information, see Pru: Manage your Local Government AVC Pension Plan.

You can elect to pay an AVC if you are in either the main or 50/50 section of the scheme.

You decide how much you can afford to pay. AVCs are deducted from your pay, just like your normal contributions. Your LGPS and AVC contributions are deducted before your tax is worked out, so, if you pay tax, you receive tax relief automatically through the payroll. You qualify for tax relief (normally at your highest rate) on all pension contributions up to 100% of your taxable earnings, including your normal contributions.

Deductions start from the next available pay period after your election has been accepted and you may vary or cease payment at any time whilst you are paying into the LGPS.

Our in-house AVC provider is the Prudential. If you would like more detailed information you can visit The Prudential's AVC Information page.

If you decide that you wish to start paying AVCs, you can set up your contributions at any time by visiting The Prudential's AVC Joining page.

Once you have started paying AVCs, you can register your online account with Prudential by visiting The Prudential's online registration page - you will need your policy number, date of birth and postcode to register your account.

Once you have registered your online account, you can use it to:

  • check the value of your policy
  • view your AVC documents online
  • contact the Prudential using their secure message service
  • update your personal information.

Existing members can also use the Prudential's telephone enquiry line on 0345 6000 343.

For more information about AVCs, see A member's guide to AVCs.

Paying Free Standing Additional Voluntary Contributions (FSAVCs)

Free Standing Additional Voluntary Contributions (FSAVCs) are similar to in-house AVCs but are not linked to the LGPS in any way.

With FSAVCs, you choose a provider, usually an insurance company. You may want to consider their different charges, alternative investments and past performance when you do this. You choose how much to pay into an FSAVC arrangement. You can pay up to 100% of your UK taxable earnings, less your normal pension contributions.

Your FSAVC fund should grow as it is invested and will be available later in your life to convert into an additional pension of your choice. You can often choose which investment route you prefer.

Contribute to a personal or stakeholder pension arrangement

You may be able to make your own arrangements to pay into a personal pension plan or stakeholder pension scheme at the same time as paying into the LGPS. With these arrangements, you choose a provider, usually an insurance company. You may want to consider their charges, alternative investments and past performance when you do this. You choose (within limits) how much to pay into the arrangement.

If you pay into a personal pension plan or stakeholder pension scheme, the contributions you make to it are invested in funds managed by an insurance company. You have your own personal account that, over time, builds up with your contributions and the returns on your investment, and will be available later in your life to convert into additional benefits. You can often choose which investment route you prefer.