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Original poster

LGPS help

22 replies

Anono2022 · 24/02/2023 15:43

Can anyone please help me?

I posted the other day about paying a lump sum into my pension via my LGPS or NEST (my previous provider). I'm so bloody lost so I'm asking to be spoon fed here 🙈 so my apologies for sounding silly.

The lump sum aside, from April I want to increase my contributions direct from my salary to avoid this all this each year.

Bit of backstory, I used to pay more into my pension with Nest. When I moved jobs I was only allowed to pay a percentage which was much lower than I was paying. I didn't want to contribute less when I changed jobs but have been told for the last year that I wasn't able to pay more hence why I now have a lump sum to pay in before the tax year ends!

I was told to contact the pensions team of my payroll and they have come back to me saying no i cant do this via them. I have to pay via prudential and it all has to be confirmed through them to get my salary adjusted.

So I've gone on the LGPS website to get a quote. And I'm so confused by it.

Sometimes I feel like it will just be easier paying into my NEST and them reclaiming the tax for me! I've put in my details and requested the amount I want to pay each month. I then have to send this off for approval etc.

Please can someone help me understand?
Again I'm really sorry if I sound stupid. Maybe it is alot simpler than I am currently seeing but it seems so complicated.

All I want to do is increase what is paid into my pension and then have the net paid to me each month. So the same as now but just a high PC, lower net pay. What is the cost of buying the pension part? Is that on top of my montly contribution? Does it then get paid into you main section of your pension or a sub section? I want it going in to one pot, the main one.

In NEST i can literally pay in as and when i choose by DD or direct payment from my card, and though it is a monthly thing I like that it is flexible and I dont have to pay it in if I am unable to. However I would still prefer it to be a monthly thing from my salary as it just feels easiest (once I get my head around it). I view my PC as a regular outgoing so isnt like it's money left over at the end of each month.

Thanks for any advice in advance.

OP posts:
WelshNerd · 24/02/2023 15:50

Nest is a defined contribution scheme, so the value of your pot (and making additional contributions) is more important.

LGPS is a defined benefit scheme so you are entitled to a percentage of you annual salary. This is guaranteed. So the importance of making additional contributions is less.

Although your contributions are lower, your employers will be much higher.

Original poster
Anono2022 · 24/02/2023 15:52

So NEST isn't a bad option either?

Yes I understand my employers contributions are much higher with my LGPS pension

OP posts:
hoophoophooray · 24/02/2023 15:53

You can't increase the amount you pay into the LGPS. It's a fixed percentage of your salary that is based on your pay. I'm a member and at my salary level, I pay 8.5% of my salary in.

You can make additional contributions via salary sacrifice into the AVC scheme, which is probably the Prudential scheme mentioned. This will come from your salary but sits outside the main LGPS scheme. I'm not sure if you can make a lump sum payment into that, but you will need to do it all via Prudential - the main LGPS does not take extra contributions.

ChessieFL · 24/02/2023 15:54

Yes, as pp said they’re two completely different schemes.

In the LGPS there’s two ways of paying additional contributions. You can pay AVCs to your fund’s chosen provider (which appears to be Prudential), which will give you an additional pot with different options for taking it on retirement, or you can pay additional contributions into the main scheme to buy additional annual pension. You will need to decide which option is right for you. Have a look here: www.lgpsmember.org/your-pension/paying-in/paying-more/

ArcticSkewer · 24/02/2023 15:54

Did you contact your local government pension provider? Not your payroll team.

Original poster
Anono2022 · 24/02/2023 15:55

Ahhhh thank you. I may just pop it into my NEST then as they do all the tax reclaiming and it goes into the one pot and not sub pots

OP posts:
Twinklenoseblows · 24/02/2023 15:57

Ask if you can buy added years in the LGPS. That may be best value.

ChessieFL · 24/02/2023 15:58

You can’t buy added years in the LGPS any more but you can buy additional annual pension.

Original poster
Anono2022 · 24/02/2023 15:59

I've contacted both LGPS and pensions team for our payroll.

LGPS have very much left the decision to me and sent me the link which someone has given above and payroll have told me to contact Prudential. But if it's not going into the main section I pay in to I probably won't consider it

OP posts:
Original poster
Anono2022 · 24/02/2023 16:00

How does the additional annual pension work?

OP posts:
hoophoophooray · 24/02/2023 16:00

huh, I'm sure I was also told you can't make extra payments, only AVC's - that link looks like you can buy extra pension as well.

ask your pension team for a quote for extra years?

if you make AVC's the tax is reclaimed automatically as well, as it's salary sacrifice

Original poster
Anono2022 · 24/02/2023 16:01

They've said no. And referred me to prudential

OP posts:
hoophoophooray · 24/02/2023 16:04

If you are within 12 months of starting you might be able to transfer your existing pension in to get extra within the LGPS

I did this, all my old pots, including a NEST one, were transferred in. So I have an LGPS pot and a single AVC pot running alongside it.

Original poster
Anono2022 · 24/02/2023 16:09

How is the AVC paid upon retirement?

I wondered about transferring all my pensions in. I have about 2 I can trace, and two I cant remember the providers and I dont know how to find them? I am also 11 months in so I probably don't have enough time to do this

OP posts:
hoophoophooray · 24/02/2023 16:13

You just have to make the request before 12 months even if it takes longer to complete.

Im not 100% sure how you take the AVC - as far as I know it's like a standard pension, so a lump sum, drawdown, or buy an annuity. I'm putting £100 a month in and have 23 years before my retirement so I figured I'd work it out at some point!

to transfer in, you need to get a Transfer Out quote from each of your pots and then send to LGPS to get a Transfer In quote. Then you decide if it's worth it.

scrivette · 24/02/2023 16:18

If you pay into the AVC scheme upon retirement you can use the AVC to purchase an annuity (pension) with the LGPS or another pension provider. You may, subject to tax legislation, be able to some as a tax free lump sum.

You can purchase additional pension through the LGPS by increasing your monthly pension payments. This pension will be payable upon retirement with your usual LGPS pension. It is known as ARC (additional regular contribution) and the maximum pension you can purchase is £7300 (give or take a few £). If you search online you should be able to find the LGPS calculator to work out how much this would cost you.

You are only able to transfer a previous pension into the LGPS within one year of joining.

Original poster
Anono2022 · 24/02/2023 16:18

So does it cost to transfer your pots in? I think that's what is confusing me 'the cost to you' bit

OP posts:
Original poster
Anono2022 · 24/02/2023 16:19

How do I find my old pensions?

OP posts:
Polkadotties · 24/02/2023 16:19

OP I believe I helped you on your previous thread you may wish to re-read that. There is incorrect information being given on this thread

Original poster
Anono2022 · 24/02/2023 16:24

@Polkadotties please can I PM you?

OP posts:
Polkadotties · 24/02/2023 16:31

Anono2022 · 24/02/2023 16:24

@Polkadotties please can I PM you?

Sure :)

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