How safe is my local government pension?

This is a question many of our members have been asking over recent months. 

When the economy, inflation and investment returns start to fall it’s important to check if, and how, this impacts your finances and savings.

As a member of the Local Government Pension Scheme (LGPS), you’ll be pleased to know that any such changes do not impact your pension benefits. The LGPS is what’s known as a defined benefit pension scheme. In these schemes your pension doesn’t rely on investment performance, instead, your pension is based on a calculation set out in the regulations of the scheme.

The more common type of pension scheme is known as defined contribution. When you start paying into these schemes, you normally make an active choice on where the pension pot is invested. This then means you will see your pension pot rise and fall depending on the performance of the fund(s).

Put simply, your local government pension guarantees to pay you an annual pension income in retirement. Your employer also pays a generous amount into the scheme to meet this guarantee. To find out more please visit How do pensions and the LGPS work?

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