Early retirement reductions decrease

Your LGPS pension is payable from your Normal Pension Age. For most people this will be the same as State Pension Age, though it can be lower if you began paying in before 1 April 2014.

You can choose to take your pension earlier than your Normal Pension Age. You can currently take it from age 55, though this will rise to age 57 in 2028. If you choose to take it early, it will be reduced as it will usually be in payment longer.

The reductions applied to a pension paid early are set out in the early retirement reduction table. The closer you are to your Normal Pension Age, the lower the percentage reduction to your annual pension and lump sum.

The percentage reductions are set by the government and are subject to change from time to time.

On 3 July 2023, the government issued new guidance reducing early retirement reductions. This means that after 3 July, if you decide to take your LGPS pension before Normal Pension Age, the reductions will be lower than they would have been under the previous guidance.

For example, under the previous guidance, if you took your pension 3 years earlier than your Normal Pension Age, your annual pension would have been reduced by 14.3%. Under the new guidance, the reduction will be 13.5%.

Working out how much will be payable if you decide to take your pension early can be complicated. We recommend that you obtain an estimate using ‘my pension online’ our self-service portal. If you are within 5 years of retiring, please contact us for an estimate. We can provide up to 2 estimates in any rolling 12-month period.