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HOW MUCH WILL I PAY?
The Local Government Pension Scheme (LGPS) is provided for you by your employer who pays the bulk of the cost of your benefits.
How much it costs you depends on how much you are paid but it will be between 5.5 and 7.5% of your pay. The rate you pay depends on which pay band you fall into.
The amount you actually pay is far less than you think because contributions are tax-free and you pay a lower rate of national insurance.
If you work part-time, your rate will be based on the full-time pay rate for your job, although you will only pay contributions on the pay you actually earn.
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Pay Bands from 1 April 2011 |
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Earnings Band Range
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Contribution rate
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1
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£0
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to
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£12,900
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5.5%
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2
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£12,900.01
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to
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£15,100
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5.8%
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3
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£15,100.01
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to
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£19,400
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5.9%
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4
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£19,400.01
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to
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£32,400
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6.5%
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5
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£32,400.01
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to
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£43,300
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6.8%
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6
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£43,300.01
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to
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£81,100
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7.2%
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7
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More than £81,100
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7.5%
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For Example:
 Rachel
Works Full-Time
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Rachel works full-time and her annual rate of pay in April 2011 will be £15,768.56. This puts her contribution rate at 5.9% of her pay (which works out at £77.53 a month - less after savings in tax and National Insurance).
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 Jayne
Works Part-Time
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Jayne works part-time (18/36 hours per week) and her annual rate of pay in April 2011 will be £12,500. Her full-time equivalent annual rate of pay was £25,000. This figure determines which pay band Jayne falls into.
This puts her contribution rate at 6.5% of her actual pay (which works out at £67.71 a month - less after savings in tax and National Insurance).
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How have the 2011 pay bands been calculated?
Since 1 April 2008, the rate of LGPS pension contribution deducted from your pay by your employer, has been based on a series of pay bands. These contribution rates range between 5.5% and 7.5%.
The pay bands have altered each April according to the rate of inflation as calculated by the Retail Prices Index (RPI) in the 12 months ending with the previous September. As the RPI recorded minus 1.4% inflation in the 12 months ending on 30 September 2009, there was no change to the pay bands from 1 April 2010.
However, in June 2010, the Coalition Government announced that future inflationary increases would be calculated using the Consumer Prices Index (CPI). Consequently, in April, pay bands would alter according to the CPI figure for the 12 months ending with the previous September. These amounts would then be rounded down to the nearest £100.
