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    How is my pension taxed?

  • Your pension is taxed.

    HM Revenue and Customs (HMRC) set or amend your tax code based on your total income including the state pension and any other income you have.

    As we do not set your tax code, all we can do if you question your tax code with us is to suggest that you contact HMRC (0300 200 3300).

    Tax Help for Older People is a service from the charity Tax Volunteers providing free, independent and expert help and advice for older people on lower incomes who cannot afford to pay

    Your lump sum at retirement paid from us is normally completely tax-free. Please note that, if your employer has awarded you compensatory added years, the lump sum arising from them could be liable to a tax charge.

  • Will my pension increase?

  • LGPS pensions are inflation proofed.

    Your pension cannot go down.

    You will get an increase in pension every April if prices have increased.

    The pension increase for 2018 will be 3.0%.

    The pension increase for 2017 was 1%.

    Your April 2017 payment will only reflect about 2/3 of the increase, as it takes effect from Monday 10 April 2017, not from 1 April 2017. Your May payment will reflect the increase in full.

    There was no pension increase in 2016 as the Consumer Prices Index for the year to Sep 15 was negative. 

    The previous few years' increases were:

    Apr 15 1.2%

    Apr 14 2.7%

    Apr 13 2.2%

    Apr 12 5.2%

    Apr 11 3.1%

  • How will my pension be paid?

  • Your pension will be paid monthly directly into your bank account by the Bank Automated Credit System (BACS).

  • Do I get a pay advice slip every month?

  • You'll get a payment advice slip:

    * with your first payment

    * every April advising you of the pension increase

    * every May with your P60

    * if you receive an increase in your pension that is more than £5

    * if your tax code changes

  • Why have you kept my P45?

  • Your employer should automatically send your P45 to us as we are now considered your employer. We will complete parts 1 and 3 of the form and forward it to HM Revenue and Customs, Centre 1, East Kilbride.

    The tax office will then work out your total income and advise us of the correct tax code to use.

  • Should I notify you if I change address?

  • Yes.

    We contact all of our members at least once a year about their pension.

    We are required to have an up-to-date address for all our pensioners. If we do not have one, we may have to suspend payment of your pension.

    You can change your address on SPFOnline.

    You can contact us by phone, email or post to let us know your new address.

  • How do I notify you of a change of bank account?

  • You can change your bank details on SPFOnline.

    You can alternatively complete our change of UK bank details. Make sure you sign it, as we need your signature to authorise this change.


  • I have moved overseas. Can I have my pension paid into my overseas bank account?

  • If you move abroad and no longer want your pension paid into a UK bank account, you can instruct us to pay your pension direct into an overseas account in the single Euro payments area using our SEPA form. If you need a form for a country not in the single Euro payments area, please contact us.

  • Is a lump sum paid on death of a pensioner?

  • If you are under 75, left service before 1 April 2009 and die within five (ten if you were in service on 1 April 2009) years of retiring, the remainder of your first five (ten if you were in service on 1 April 2009) years' pension is paid in one lump sum death grant to your widow, widower, civil partner, or someone you've nominated. For any service after 31 March 2015 any tax free cash you took at retirement will reduce your death grant.

    If you are also an active member of the LGPS when you die, only the highest of your death grant rights in the LGPS is paid. From your rights as an active, deferred and pensioner member, only one (the highest) death grant right is paid. You do not receive a separate death grant payment from each type of membership.

    To protect your family make sure you have made a nomination. You can make and update your nominations using SPFOnline. You can alternatively complete a Nomination Form.

  • What were the April 2016 changes to state pension, contracting out and NI?

  • What will the pension increase for 2018 be?

  • The pension increase for 2018 will be 3%.

    The pension increase for 2017 was 1%.

    There was no increase to pensions in April 2016, as the Consumer Prices Index for the 12 months to September 2015 fell by 0.1%. LGPS pensions did not go down from April 2016 despite the UK being in deflation.

    The previous six pension increases were: Apr-15 1.2%; Apr-14 2.7%; Apr-13 2.2%; Apr-12 5.2%; Apr-11 3.1%; and Apr-10 0%.

  • Will my spouse / dependants be entitled to a pension if I die on pension?

  • On your death your pension entitlement stops immediately, so it's important your spouse or someone else in your family informs us immediately.

    Your husband, wife or civil partner and any qualifying children may then receive a pension which increases in line with the cost of living if s/he is entitled to one under the LGPS regulations.

    If you were an active member after 31 March 2009 and are not married or are not in a civil partnership, but have:

    • Lived with someone for 2 years at the time of your death
    • Whilst both of you have been free to marry
    • Whilst you have been financially interdependent

    a cohabiting partner can receive a survivors pension provided s/he meets the criteria under the LGPS regulations.

    Short-term widow's, widower's, or civil partner's pension

    If you left service before 1 April 2009, for three months after your death (six if there are any eligible children in the care of your husband, wife or civil partner), your spouse will receive a pension of the same amount as you were receiving from your pension. The situation is slightly different for husbands and civil partners.

    Long-term widow's, widower's, nominated cohabiting partner's or civil partner's pension

    After the short-term pension ends or if you were in service on or after 1 April 2009, your spouse will receive a pension which increases with the cost of living for the rest of their life, even if they re-marry. This will be based 1/160 of your final pay times your eligible service (or pay for service after 31 March 2015). The situation is slightly different for husbands, cohabiting / civil partners or if you married after you retired.

    Short-term qualifying children's pension

    Children's pensions are usually payable after your widow's, widower's or civil partner's short-term pension has finished. If your children are not in the care of your partner, your children also get a short-term pension equal to your pension for three months after you die.

    If there is no widow's, widower's or civil partner's pension to be paid, a children's short-term pension lasts six months.
    Children's pensions are shared among your children.

    Long-term qualifying children's pension

    Your children may receive a long-term pension for as long as they are eligible (under 17, or up to 23 and in full-time education which started before they were 17, or aged over 16 and disabled within the meaning off the Equality Act 2010).  The amount depends on a number of factors, including how many children you have, whether they are in the care of your husband, wife, or civil partner, and if your child is receiving any pay while in full-time training.

  • Where can I find LGPS legislation?

  • LGPS 2015 regulations and some guidance for Payroll / HR practitioners is available at NOTE: tiered contributions guidance is Appendix 1 of the Payroll Guide.

    Pre 01 04 2015 material is available at


  • What is COPE?

  • If you ask the DWP for a State Pension Forecast, you may come across the term COPE, Contracted Out Pension Equivalent.

    If you were a member of the LGPS between 1978 and 2016, you will have paid less National Insurance (NI) contributions than had you not joined the LGPS.

    A consequence of paying less NI is that you are entitled to less state pension.

    The amount of state pension that you are not entitled to is called COPE.

    Your benefits from the LGPS will be more than COPE.