Changes to late retirement increases

Revised factors for calculating late retirement increases will apply from 1 September 2023.

LGPS pensions are usually paid at Normal Pension Age. This is the date your pension can be paid without reductions and it is shown on your annual benefit statement.

If you stopped paying in before 1 April 1998, you will have to take your LGPS pension when you reach your Normal Pension Age.

If you paid in after this date, you can choose to leave your pension until age 75. Late retirement increases apply when you take your pension after your Normal Pension Age (minimum of age 65).

Late retirement increases are an additional amount added to your annual pension. Before 1 September 2019, pensions were worked out by multiplying each day after your Normal Pension Age by 0.010%.

After 1 September 2019, the percentage increase depends on how many years late the pension is being paid. The higher the number of years, the higher the percentage increase factor.

What has changed?

The Government Actuary Department has issued a new set of late retirement factors which will apply to LGPS pensions from 1 September 2023.

In most cases, the new factors represent a slight uplift when compared with the old factors.

However, retirement grants (automatic lump sums associated with pension built-up before 1 April 2008) will no longer receive late retirement increases after 1 September 2023.

The revised factors can be found on the late retirement webpage which also has an example of how the factors are used to calculate late retirement increases.

Late retirement increases can be complicated to work out and they will not be included in estimates obtained from ‘my pension online’. If you are close to retirement and you want to know what late retirement increases will apply to your pension, please contact us for an estimate. We can provide you with up to 2 pension estimates in any rolling 12-month period.