Local Government Pension Scheme

sailorsgirl64

Hi all 

I'm seeking some advice if possible please. 

I received a letter last week from the LGPS that I was a member of almost 40 years ago for a short period that they are now looking to start making payments to me in October and pay my lump sum.

I have a couple of questions:-

1.   Am I able to take this pension while I'm still working - I am unable to retire until I turn 67? and 

2.  Bearing in mind that I have drawn down 2 small pension pots to the total sum of approximately £31,000, will I have to pay tax on the lump sum from the LGPS that I will be due in October?

Once I have these answers, I can then proceed to deal with the letter and paperwork that I've received.

I really appreciate any advice that you can give. 

Kind regards 

Brie

No problem continuing to work.  Just check that the extra money isn't going to knock you into a higher tax bracket.  

Do you have to take the lump sum?  Just a thought that you might consider the alternatives.

daveyjp

Yes you can take the pension and continue to work.

There is no tax to pay on the lump sum.  However have a look into options for increasing or decreasing the lump sum amount.  It may benefit you to increase it or you may wish to reduce it and receive extra guaranteed inflation proof monthly income for life (but the monthly payment will be taxed as income).

Andy_L

Is abatement still a thing in the LGPS?

Abatement is the practice of comparing the former salary with the new salary plus pension and if the latter is higher, reducing the pension.  

Silvertabby

Andy_L said:

Is abatement still a thing in the LGPS?

Abatement is the practice of comparing the former salary with the new salary plus pension and if the latter is higher, reducing the pension.  

Generally, no - but if it's still an employer discretion it may still be applied.  

But even if it did apply, it would only happen if OP's current job is also LGPS.

Sarahspangles

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

scoot65

Sarahspangles said:

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

Can I ask, why do say this?

I reach 60 next year as was not intending to take my LGPS for a couple of more years so.

Silvertabby

scoot65 said:

Sarahspangles said:

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

Can I ask, why do say this?

I reach 60 next year as was not intending to take my LGPS for a couple of more years so.

Because you meet the Rule of 85.  ie, your membership (including deferred membership) plus your age = 85+.

In your case, your LGPS pension must be paid from your normal retirement age of 60.  

Sarahspangles

scoot65 said:

Sarahspangles said:

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

Can I ask, why do say this?

I reach 60 next year as was not intending to take my LGPS for a couple of more years so.

As Silvertabby says, you meet the Rule of 85. It means your pension can be paid unreduced at 60 - if you take it at any other point you lose out. So there’s no point deferring.

k6chris

Sarahspangles said:

scoot65 said:

Sarahspangles said:

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

Can I ask, why do say this?

I reach 60 next year as was not intending to take my LGPS for a couple of more years so.

As Silvertabby says, you meet the Rule of 85. It means your pension can be paid unreduced at 60 - if you take it at any other point you lose out. So there’s no point deferring.

If you meet the rule of 85, do LGPS automatically inform you when you are 60 and can you carry on working or is retirement expected??

Silvertabby

k6chris said:

Sarahspangles said:

scoot65 said:

Sarahspangles said:

I think from your name your pension may be commencing at 60. If so then deferring may not be to your advantage.

Can I ask, why do say this?

I reach 60 next year as was not intending to take my LGPS for a couple of more years so.

As Silvertabby says, you meet the Rule of 85. It means your pension can be paid unreduced at 60 - if you take it at any other point you lose out. So there’s no point deferring.

If you meet the rule of 85, do LGPS automatically inform you when you are 60 and can you carry on working or is retirement expected??

The LGPS will contact OP.  It will be easier for them if they have a current address on record!

Retirement is not expected.