You might be thinking of opting out of the Local Government Pension Scheme (LGPS) for a variety of reasons. Whatever the reason, it could pay you to spend five minutes reading this to find out what you would be giving up - it could save you a fortune later.

Two things to think about before you opt out

• It costs less than you might think to be in the LGPS. If you pay tax and National Insurance you get tax relief on your contributions and you pay less National Insurance. If you opt out you'll pay more tax and National Insurance.
  
  
• The LGPS is one of the best occupational pension schemes in the UK and as a member you enjoy all the benefits listed below.

The benefits of staying in the pension scheme

• A guaranteed index-linked pension, payable for life, based on your pay and how long you’re a member.
  
  
• You can take a tax free lump sum when you retire.
  
  
• Lump-sum death grant of three times your pay if you die for the people you choose.
  
  
• A pension for your husband, wife, civil partner or your nominated partner.
  
  
• A pension if you become too ill to work.
  
  
• Possible early retirement (from age 55) if your employer agrees.
  
  
• Early retirement if you’re age 55 or over and made redundant.
  
  
• Tax relief on your contributions and National Insurance savings.
  
  
• Schemes to help you get even bigger benefits by paying extra.
  
  

And did you realise?

• On average, for every £1 you pay into the scheme, your employer pays £2.
  
  
• You get life cover for your loved ones from the moment you join, and you don't have to pass a medical.
  
  
• You even get tax relief on extra payments you choose to make, like buying extra pension or paying into one of our Additional Voluntary Contribution (AVC) schemes
  
  
• In the LGPS there are no hidden fees or charges - you simply pay a set percentage of your pay.
  
  
• Your retirement income is guaranteed, no matter what happens to share prices or the stock market. In other words there's no investment risk to your benefits - you get a package of benefits that's guaranteed in law.
  
  
• Once you start getting your pension it will go up each April in line with the Consumer Prices Index to keep your benefits in line with the cost of living.
  
  

Your employer contributes too - but only into the LGPS

As we've already mentioned, your employer pays money into your pension too and this alone could be worth up to twice the amount that you pay into it. If you opt out of the LGPS, this will stop -your employer can't pay into any other type of pension scheme instead.

It's up to you now

You could, of course, just depend on the state pension, but will this be enough to give you the standard of living you expect when you retire? Contributing to the LGPS is one way to protect yourself against financial worries in old age.

Whatever your position, you need to think about your options now. We all need to make choices at different times during our lives, and our choices can have a real effect on our future. So it's worth investing some time now to make sure you make the best choice for you.

If you still want to opt out of the LGPS please contact your Human Resources department, or phone us on 01274 434999 and we'll send you the form you need to fill in.

If you opt out and you've been in the LGPS for less than three months you will get a refund of your contributions through your salary. If you've been in the scheme for more than three months, you will get deferred benefits (sometimes called frozen benefits) in the pension scheme instead that you can take when you retire. If this applies to you we will write to you with more details once your employer tells us you have opted out.