Paying More or Less
With benefits ranging from a secure pension guaranteed by law, to different types of retirement options, your pension has been designed with you and your future in mind.
A main advantage of the LGPS is that it is flexible and can adapt to changing times in your life, giving you the best chance of achieving a comfortable retirement. One of the ways it does this is by offering contribution flexibility, allowing you to pay more or less into your pension pot depending on your own financial situation.
Paying Less
Perhaps you are looking to cut back on how much you pay into your pension, or considering stopping payments altogether. Rather than completely leaving the scheme, you can instead reduce your monthly pension payments with the 50/50 option. 50/50 allows you to pay half the contributions to build up half the pension. This way, rather than opting out and saving nothing, you can continue building your pension and saving towards your retirement.
50/50 is designed to be a short term option for when times are financially tough. As such, you'll be brought back into the main section where you pay full contributions around every 3 years. You'll be advised when this is happening and will have the option to continue with 50/50. You are free to move between 50/50 and the main section as often as you wish.
Being in 50/50 doesn't affect the value of any ill health or death in service cover meaning you would receive the same amount of these benefits as you would if you were paying full contributions.
For more information on reducing your pension payments click here. To join 50/50 complete and return the Join 50/50 form.
Paying More
Maybe retirement is approaching or you’re looking for ways to retire sooner. Whatever your circumstances, if you are considering boosting your pension with a top up, there are 2 ways to pay more:
- You could pay Additional Pension Contributions (APCs) into your pension account at the North East Scotland Pension Fund along with your normal contributions.
- You could pay Additional Voluntary Contributions (AVCs) into your own personal account with Prudential, our AVC provider.
With APCs you will increase the amount of annual pension you receive from us and they will be paid alongside your main NESPF pension. Alternatively, if you opt for AVCs, you can use them to buy extra annual pension within the LGPS or with another provider. You also have the option to take up to 100% of your AVC as a tax-free lump sum (subject to HMRC limits).
Because APCs and AVCs are two different products, their terms and conditions vary and as such you may find one option is more suitable for you than the other. The Fund is unable to recommend whether APCs or AVCs would be the best option for you so it may be advisable to seek advice from an independent financial advisor who can review your own personal circumstances.
More information on paying more towards your pension can be found here, where you can also view FAQs about the two options.
The Fund recognises that life is not always straightforward and unexpected events can arise with little to no warning. Therefore, whether there are times you find yourself paying more into your pension, or less, the most important factor is that you are still considering your pension and taking steps towards a more comfortable retirement.
