Can I access my local government pension at 55? Guide to LGPS Early Retirement

Currently, members of the Local Government Pension Scheme (LGPS) with at least two years of membership can choose to take their pension voluntarily from age 55 onwards. However, this option typically comes with significant reductions to your annual pension, as it will be paid out for a longer period. It's crucial to understand these rules, especially with the minimum retirement age set to rise in 2028.

Quick Summary

Yes, you can voluntarily access your Local Government Pension Scheme (LGPS) benefits from age 55 if you have met the two-year vesting period, but your pension will be reduced. Exceptions, such as ill-health or redundancy, can permit unreduced access. A looming government change will raise the minimum age to 57 in April 2028, with some protections potentially in place for long-term members.

Key Points

• Yes, with reductions: You can currently access your LGPS pension voluntarily from age 55, but the amount will be reduced due to early payment.

• Age will increase in 2028: The minimum pension age for voluntary access is scheduled to increase to 57 from 6 April 2028.

• Two-year rule applies: You must have at least two years of scheme membership (the vesting period) to be eligible to receive retirement benefits.

• Redundancy can waive reductions: If you are made redundant or retired due to business efficiency at age 55 or over, your main LGPS pension is paid immediately and unreduced.

• Employer consent for flexibility: Flexible retirement, which allows you to draw your pension while working part-time, requires your employer's consent and may involve reductions.

• 85-Year Rule protection: Members who were part of the scheme before 1 October 2006 may have some protection against early retirement reductions under the 'Rule of 85'.

• Ill-health is an exception: If you retire due to permanent ill-health, you can access your pension at any age without reductions, subject to medical approval.

Can I voluntarily take my LGPS pension at 55?

For members of the Local Government Pension Scheme (LGPS) who have met the two-year vesting period and left their employment, voluntary early retirement is currently possible from age 55 onwards. This applies to both actively contributing members and those with deferred benefits. Taking your pension early will result in a permanent reduction because it will be paid for a longer duration. The earlier you take your pension, the greater the reduction.

The two-year vesting period

To qualify for LGPS retirement benefits, including early access at 55, you need a minimum of two years of scheme membership, known as the vesting period. Previous pension transfers may count towards this period.

Upcoming age increase

The earliest age for voluntarily taking your LGPS pension is set to rise from 55 to 57 from 6 April 2028. This change will not impact those retiring before this date. There might be protections for members in the scheme before 4 November 2021, but this awaits confirmation.

Understanding early retirement reductions

Voluntarily taking your LGPS pension before your Normal Pension Age (NPA) leads to actuarial reductions. Your NPA depends on when you accrued benefits:

• Benefits after 1 April 2014: NPA is your State Pension age.
• Benefits before 1 April 2014: NPA is typically 65.

Reduction percentages are government-set and can change. Your pension fund can provide a personalised estimate.

The Rule of 85

Members with scheme membership before 1 October 2006 may have 'Rule of 85' protection against reductions when their age plus membership equals 85. This protection can be applied at employer discretion for voluntary retirement between 55 and 60, and is automatic for voluntary retirement at 60 or over.

Comparison of LGPS retirement options at age 55+

Retirement Type	Eligibility at Age 55+	Early Retirement Reductions	Employer Consent Required?	Conditions & Notes
Voluntary Retirement	Yes, if you have met the 2-year vesting period and left employment.	Yes, a permanent reduction applies as your pension is paid early.	No (for voluntarily taking deferred benefits).	Requires you to have left your job. Reductions are based on how many years before your NPA you take it.
Flexible Retirement	Yes, if you have met the 2-year vesting period, reduce hours/grade, and employer agrees.	Yes, typically applies, though your employer may waive part or all of it at their discretion.	Yes, your employer must agree.	Allows you to take some or all of your benefits while continuing to work in a reduced capacity.
Redundancy or Business Efficiency	Yes, if aged 55 or over and have met the 2-year vesting period.	No, for your main LGPS pension.	No, payment is immediate and triggered by the employer's decision.	Requires leaving employment due to redundancy or efficiency. Additional pension may still be reduced.
Ill-Health Retirement	Yes, at any age.	No, benefits are paid unreduced, but you must meet strict medical criteria.	Yes, requires employer approval following an independent medical opinion.	You must be permanently incapable of working due to injury or illness.

Flexible retirement: An alternative option

If you wish to access benefits without fully retiring, flexible retirement is an option from age 55 with employer agreement. This involves reducing hours or grade while taking some benefits. You can continue building new benefits. Flexible retirement benefits taken before NPA are usually reduced, but your employer can waive some or all of the reduction.

Conclusion

Accessing your local government pension at 55 is permissible but involves significant considerations. Voluntary early retirement from age 55 (rising to 57 in 2028) typically results in a permanent pension reduction. Exceptions like redundancy or ill-health may allow unreduced access under specific conditions. Before deciding, consult your LGPS fund for a personalised estimate and consider independent financial advice.

LGPS - Local Government Pension Scheme: Taking your pension

Frequently Asked Questions

Will my local government pension be reduced if I take it at 55?

Yes, if you voluntarily take your pension at age 55, it will be subject to a permanent actuarial reduction. This is because you will be receiving your pension for a longer period of time than originally planned.

What is the two-year qualifying period for the LGPS?

The two-year qualifying period, or vesting period, is the minimum time you need to be a member of the LGPS to be entitled to receive benefits. This is a prerequisite for accessing your pension at 55.

Will the minimum age for accessing my LGPS pension increase?

Yes, the government has announced that the minimum age for voluntarily accessing your pension will increase from 55 to 57 from 6 April 2028. This will not affect those retiring before that date.

Can I still work for my local government employer if I take my pension at 55?

In most cases, you must have left your job to receive your pension voluntarily. However, you can consider a 'flexible retirement' arrangement, which allows you to reduce your hours and take some benefits with your employer's agreement.

What is the 'Rule of 85' and does it apply if I retire at 55?

The 'Rule of 85' applies to members who joined the scheme before 1 October 2006 and provides protection against some early retirement reductions. If you retire voluntarily between 55 and 60, your employer has the discretion to apply this rule. If you retire at 60 or over, it is automatically applied.

Are there any circumstances where I can take my LGPS pension unreduced at 55?

Yes. If your employment is ended by your employer due to redundancy or business efficiency at age 55 or over, you will receive your LGPS benefits immediately and unreduced. Ill-health retirement can also be accessed without reductions at any age.

How can I get an estimate of what my pension would be at 55?

You can request a pension estimate from your specific LGPS fund. Many funds offer online portals (like 'My Pension Online') where you can run calculations based on different retirement dates.