Local government pensions

The Local Government Pension Scheme (LGPS) is the main pension scheme for the local government sector in England and Wales.

As well as being participating employers in the LGPS, some local authorities are also administering authorities and have a separate role in administering the regional funds within the LGPS. Administering authorities may also provide third party administration services to other public service pension scheme funds, such as the Police Pension Scheme and the Firefighters’ Pension Scheme.

Local authorities may also participate in:

•
the Teachers’ Pension Scheme in respect of teachers employed at certain maintained schools, and
•
the NHS Pension Scheme in respect of former NHS employees whose employment has transferred to such local authorities

The Local Government Pension Scheme (LGPS)

The main pension scheme for local authorities is the LGPS. The LGPS is a statutory, public service pension scheme for local government and related employees in England and Wales. There are separate schemes in Scotland and Northern Ireland. For information on Scotland, see Practice Note: Public sector pension schemes in England and Scotland—key differences.

The LGPS is the largest of all the public service

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

CA upholds UT decision disallowing corporation tax deductions in relation to UURBS (A D Bly Groundworks and Civil Engineering v HMRC)

Pensions analysis: The Court of Appeal (CA) dismissed the taxpayers’ appeals against the decision of the Upper Tribunal (UT) finding that expenditure incurred by them was disallowed under section 54 of the Corporation Tax Act 2009 (CTA 2009), because it was not incurred ‘wholly and exclusively for the purposes of the trade’. The CA also upheld the decision of the UT on HMRC’s cross-appeal, that the expenditure was not disallowed under CTA 2009, s 1290. Written by Rebecca Murray, Barrister at Devereux Chambers.

Pensions weekly highlights—27 November 2025

This week’s edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers.

DWP responds to Parliamentary Work and Pensions Committee on DB pension surplus release powers

The Department for Work and Pensions (DWP) has published a letter responding to the Work and Pensions Committee’s inquiry and evidence session into discretionary payments and member representation in defined benefit (DB) pension schemes. It explained that the Pension Schemes Bill gives trustees greater flexibility to use scheme surpluses, including by allowing employers to access surplus funds where trustees judge this appropriate. Trustees may negotiate conditions that benefit members, such as discretionary increases for pre-1997 pensions, and new guidance already encourages schemes to develop policies on surplus management as part of good governance. The government confirmed ongoing work with HMRC on the tax regime for surplus release and emphasised that trustees remain responsible for determining how members benefit while ensuring that the primary purpose of schemes, the provision of retirement income, is maintained.

Budget 2025—key Pensions announcements

In the Budget 2025, on 26 November 2025, the Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, announced (i) a £2,000 annual cap (from April 2029) on salary sacrifice pension contributions eligible for NICs relief, (ii) a relaxation of defined benefit (DB) surplus rules from April 2027 to allow well-funded schemes to make incentivised surplus payments directly to members, and (iii) new CPI-linked inflation protection (capped at 2.5%) for pre-1997 PPF and FAS pensions where legacy schemes had provided such increases.