LGPS Pension options

Elika0215

Am trying to sort out all my finances and this site has been amazing, so am learning pretty quickly.

Situation is:
- I'm in my late 40s, employed by a school in admin and hold a LGPS pension. I currently contribute about 6% of salary and the council contribute as well (quite high but don't recall the figure).

- I have a lump sum of around £7,500 that I'd like to invest and am happy to have it locked away in the pension. Incidentally, the council will not increase their contribution accordingly which is understandable.

- The scheme either allows the full pension pot to be withdrawn/provide a pension income OR keep it going until retirement age if I want to continue working.

So, my ideal scenario is being able withdraw 25% tax free at 55 and have the option to continue working.

The options I see are;
1) Invest the £7,500 in the LGPS scheme, withdraw it all at 55 and then open a new pension if I continue working.

2) Invest the £7,500 in a completely new personal pension scheme/SIPP unaffiliated with the government.

3) Put the money in a locked 5 year interest account or low-risk investment <-- recommendations would be welcome.

Thank you - responses are genuinely appreciated.

Silvertabby

1) Invest the £7,500 in the LGPS scheme, withdraw it all at 55 and then open a new pension if I continue working.

The only way you could do this is by purchasing added pension. You should be able to find a calculator on your LGPS website - but don't expect a fantastic amount as you would be paying your employer's contributions as well as your own. Whatever pension you buy would then be subject to an early retirement reduction if taken before normal retirement age (State pension age).

You won't be able to take your LGPS pension at 55 and carry on working in the same job for the same hours. You will have to either retire or take flexible retirement (the latter requires your employer's approval and usually involves a substantial drop in hours/salary). Bear in mind that if you do retire/take your pension at 55 it will be subject to - probably quite hefty - early retirement reductions.

So, my ideal scenario is being able withdraw 25% tax free at 55 and have the option to continue working.

Nor will you be able to take a cash lump sum at 55 and leave the rest for later. With the LGPS it's all or nothing.