How your pension is worked out

Your pension account

Each year 1/49th of your pensionable pay and any assumed pensionable pay is put into your pension account. At the end of the year it is adjusted to take into account the cost of living. The next year the same thing happens again and so on.

As an example let's look at the build up in a member's pension account over 5 years in the scheme.

Let's assume that the member joined the scheme on 1 April 2014, that their pensionable pay was £24,500 in the first scheme year and increases by 1% each subsequent year.

The cost of living (revaluation adjustment) for the scheme years ending on 31 March 2015, 31 March 2016, 31 March 2017, 31 March 2018 and 31 March 2019 is 1.2%, -0.1%, 1%, 3% and 2.4% respectively.

Scheme Year
Opening Balance
Build up in Scheme Year (pay/build up rate=pension)
Total account 31st March
Cost of Living adjustment
Total pension
1. 2014-15£0.00£24,500/49 = £500.00£500.001.2% = £6£500.00 + £6 = £506.00
2. 2015-16£506.00£24,745/49 = £505.00£1,011.00-0.1% = -£1.01£1,011.00 + -£1.01 = £1,009.99
3. 2016-17£1,009.99£24,992.45/49 = £510.05£1,520.041% = £15.20£1,520.04 + £15.20 = £1,535,24
4. 2017-18£1,535.24£25,242.37/49 = £515.15£2,050.393% = £61.51£2,050.39 + £61.51 = £2,111.90
5. 2018-19£2,111.90£25,494.79/49 = £520.30£2,632.202.4% = £63.17£2,632.20 + £63.17 = £2,695.37

So in this example the total annual pension built up in the account after 5 years is £2,695.37

If you are paying extra contributions to buy extra pension through Additonal Pension Contributions (APCs) or Shared Cost Additional Pension Contributions (SCAPCs) the amount you buy in each year is added to your pension account.

If you have more than one job you will have a separate pension account for each employment.

If you transfer a previous pension into the LGPS the amount of pension that the transfer purchases is added to your pension account in the year the transfer takes place.

If you were to join the 50/50 section of the LGPS you would pay half your normal contributions for half the normal pension build up. This means that for each year you are in the 50/50 section, 1/98th of your pensionable pay is put into your pension account (instead of 1/49th as shown above). For more information about the 50/50 section of the scheme see the section on Contributions Flexibility.