Shropshire County Pension fund

Taking care of your Local Government Pension in Shropshire

Early Retirement

You can choose to retire and draw your pension from age 55. You do not need your employer’s consent to draw your pension before your normal pension age (NPA). However, your pension is normally reduced if it is paid before your normal pension age to take into account it being paid for longer.

Your benefits are calculated to the date of leaving the scheme and are then reduced. How much your benefits are reduced by depends on how early you draw them.

Membership prior to 1 April 2014 will still be linked to an NPA of 65. This means that you can still take your benefits from this age, however the service built up from 1 April 2014 will be linked to your state pension age.

Therefore, benefits built up pre and post April 2014 will have a different NPA, and as such, a different rate of reduction for each period may be applied depending on when the benefits were built up.

The reduction to benefits is calculated in accordance with guidance issued by the Secretary of State. The reduction is based on the length of time (in years and days) that you retire early – i.e. the period between the date your benefits are paid and your NPA. The earlier you retire, the greater the reduction.

The percentage reductions, issued 29 April 2016, for retirements up to 13 years early are shown in the table below. Where the number of years is not exact, the reduction percentages are adjusted accordingly.

Reduction factor table for benefits paid up to 13 years early

Pension Reduction Retirement Grant Reduction %
Years Early Males Females All Members
0 0.0% 0.0% 0.0%
1 5.6% 5.2% 2.9%
2 10.8% 10.01% 5.7%
3 15.5% 14.6% 8.5%
4 20.0% 18.8% 11.2%
5 24.0% 22.7% 13.7%
6 27.8% 26.4% 16.3%
7 31.4% 29.8% 18.7%
8 34.7% 33.0% 21.1%
9 37.7% 36.1% 23.4%
10 40.6% 38.9% 25.6%
11 44.2% 42.2% N/A
12 47.6% 45.5% N/A
13 50.9% 48.6% N/A

Your employer can agree not to make any reduction. This is a discretion and you can ask them what their policy on this is.

If you are thinking of retiring early you should contact Shropshire County Pension Fund for a quotation of the benefits payable or log into ‘My Pension Online’. You can also use ‘My Pension Online’ to run calculations on converting some of your annual pension to provide a lump sum if this is a retirement option that you are considering.  The LGPS member website also has a calculator to help you investigate this potential retirement option.

Further information

‘My Pension Online’

Calculator (this link will redirect you to the national LGPS member website)