Early Retirement

You can elect to voluntarily retire at any time from age 55 to 75 and receive your LGPS benefits; however, they may be reduced to take account of early payment before your normal pension age (equal to your state pension age, or at least age 65).

Voluntary Retirement before age 60 

It should be noted that if you voluntarily retire and receive your LGPS benefits before age 60, any ’85 Year Rule’ protection does not apply and your pension benefits will be reduced to take account of early payment before your normal pension age.

Your Employer has the discretion whether to apply any ‘85 Year Rule’ protection that may be applicable to your circumstances and in this case you would need their permission to retire and receive your pension benefits.

Voluntary Retirement from age 60

If you voluntarily retire from age 60 but before normal pension age, your pension benefits will be reduced to take into account that they are being paid early but any ’85 Year Rule’ protection you may have will be applied. The reduction is calculated in accordance with guidance issued by the Government Actuary Department.

 

As a guide, the percentage reductions for early retirement are shown in the table below. Where the number of years is not exact, the reduction percentages are adjusted accordingly.

Years Paid Early  Pension Reduction (men) %  Pension Reduction (women) %  Lump Sum Reduction (both) %
0 0 0  0
1 5.6 5.2  2.9
2 10.8 10.1 5.7
3 15.5 14.6 8.5
4 20 18.8 11.2
5 24  22.7 13.7
6 27.8 26.4 16.3
7 31.4 29.8 18.7
8 34.7 33 21.1
9 37.7 36.1 23.4
10 40.6 38.9  25.6
11 44.2 42.2 N/A
12 47.6 45.5 N/A
13 50.9 48.6 N/A

’85 Year Rule’ Protection

If you joined the LGPS before 1st October 2006, you may have some protection from the early retirement reduction if your age and LGPS membership, in whole years add up to 85, at retirement.  Further information is available from the Pension Section.