Local Government Pension Scheme (LGPS) Contribution Bands 2026/27
The LGPS uses banded employee contribution rates based on actual pensionable pay, from 5.5% to 12.5%. Here's how the bands work, how they're set, and what you get for your contribution.
What the LGPS is
The Local Government Pension Scheme (LGPS) is one of the largest public sector pension schemes in the UK, covering employees of local councils and many related bodies (schools support staff, some charities and academies, and other admitted bodies) across England, Wales, Scotland and Northern Ireland (with separate but broadly similar schemes in Scotland and NI). It is a defined benefit, career average revalued earnings (CARE) scheme.
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Open Pension calculatorHow LGPS contribution bands work
Unlike income tax, where different slices of pay are taxed at different marginal rates, LGPS contribution rates are banded on total pensionable pay — whichever band your annual pensionable pay falls into sets the single rate applied to all of your pensionable pay for that year.
Illustrative band structure (check your fund's current published table for exact 2026/27 figures)
| Approximate annual pensionable pay | Approximate contribution rate |
|---|---|
| Up to around £18,000 | ~5.5% |
| £18,000–£23,000 | ~5.8% |
| £23,000–£37,000 | ~6.5% |
| £37,000–£47,000 | ~6.8% |
| £47,000–£65,000 | ~8.5% |
| £65,000–£90,000 | ~9.9% |
| £90,000–£105,000 | ~10.5% |
| £105,000–£161,000 | ~11.4% |
| Over £161,000 | ~12.5% |
Why bands matter more than a single flat rate
Because the whole of your pensionable pay is charged at the rate for your band, a pay rise that pushes you into a higher band increases the contribution rate on all your pensionable pay, not just the amount above the threshold — this is different from how income tax and National Insurance work, and can occasionally make a modest pay rise feel like it costs more in pension contributions than expected.
How your pension actually builds up
Each scheme year, 1/49th of your pensionable pay for that year is added to your personal pension account within the scheme. At the end of the scheme year (or when you leave, retire, or otherwise stop being an active member), the whole accumulated pension account — including all previous years — is revalued in line with the Consumer Prices Index (CPI), keeping past service broadly protected against inflation.
The 50/50 section
Members facing financial pressure can elect to move into the 50/50 section of the scheme:
| Feature | Main section | 50/50 section |
|---|---|---|
| Employee contribution rate | Full band rate | Half the full band rate |
| Pension build-up | 1/49th of pay per year | 1/98th of pay per year |
| Death-in-service lump sum | Full cover | Full cover continues |
| Ill-health retirement cover | Full cover | Full cover continues |
This makes 50/50 a useful short-term option for members who need to reduce outgoings without losing valuable life cover and ill-health protection, though it does reduce the pension actually earned during that period.
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Open Take-Home Pay calculatorEmployer contributions
Employers pay a substantially higher contribution rate than employees — often 20% or more of pensionable pay, set individually for each employer within a fund following a triennial actuarial valuation. This rate reflects the fund's overall funding position and does not appear as a deduction on an individual payslip, but it represents a very significant part of the true cost and value of LGPS membership.
Practical tips
- Check your specific LGPS fund's current contribution band table — bands vary slightly year to year and by fund, so don't rely on figures from a previous tax year.
- If a pay rise is about to push you into a higher band, model the effect on your take-home pay before it happens, since the change applies to your whole pensionable pay.
- Consider the 50/50 option only as a short-term measure — it reduces your pension build-up, and opting back into the main section usually requires an active election.
Use the pension calculator alongside your fund's contribution table to model how your LGPS contributions affect your net pay.
Frequently asked questions
What are the LGPS contribution bands for 2026/27?
The LGPS uses banded employee contribution rates that rise with actual pensionable pay, typically ranging from around 5.5% for the lowest band to 12.5% for the highest band. Bands are reviewed and uprated annually, so check your specific fund's published table for exact 2026/27 figures.
Is the LGPS a defined benefit or defined contribution scheme?
The LGPS is a defined benefit, career average revalued earnings (CARE) scheme. Your pension builds up each year based on 1/49th of your pensionable pay for that year, revalued annually in line with CPI, rather than depending on investment returns like a defined contribution pot.
Do I pay the same contribution rate on all my pay?
No. The rate that applies to your whole pensionable pay is determined by which band your actual annual pensionable pay falls into — it isn't a marginal, slice-by-slice system like income tax, so moving into a higher band increases the rate on all your pensionable pay.
Can I pay less into the LGPS through the 50/50 option?
Yes. Most LGPS members can elect the 50/50 section, paying half their normal contribution rate in exchange for building up half the normal pension for that period — main scheme death-in-service and ill-health cover continue in full.
Does my employer also contribute to the LGPS?
Yes, and typically at a much higher rate than the employee — often 20%+ of pensionable pay, set by each fund's actuarial valuation, though this rate isn't usually shown on an individual payslip in the same way as the employee rate.
How is LGPS pension calculated each year?
Each year, 1/49th of your pensionable pay for that year is added to your pension account, and the whole accrued amount is revalued each April in line with the Consumer Prices Index (CPI), so past years' pension keeps pace with inflation.
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