Refund of contributions
If you leave your pension scheme, you may be entitled to a refund of your contributions. We've put together this page to explain the rules and how the process works.
If you leave your job or opt out of your pension scheme before retirement, you may be entitled to a refund of your contributions, depending on how long you have paid into the scheme. If you wish to opt out, it’s wise to get independent financial advice before making a decision. The information on this page will help you understand the rules and how to claim a refund.
Important
Before you opt out
It’s worth understanding the benefits of your pension scheme or getting independent financial advice.
Click on your scheme below
Am I entitled to a refund?
You are entitled to a refund if you have contributed to the scheme for three months or more but less than two years since joining or being automatically enrolled.
You also have the option of transferring your benefits to another pension scheme instead of getting a refund.
You can’t take a refund if:
- You re-join the LGPS in England and Wales within one month and one day of leaving or opting out of the scheme.
- You re-join the LGPS before you have claimed a refund.
- You have paid into the LGPS for more than two years (vesting period).
- You are currently paying into the LGPS.
- You have a deferred LGPS pension.
- You are receiving LGPS benefits.
- You transferred in an existing pension that increased your LGPS membership to two years.
- You transferred in an existing non-LGPS pension from a scheme, which did not allow refunds.
What does a refund include?
A refund of contributions includes:
How much will I get back?
Before you decide to claim a refund, it’s important to remember that when you paid contributions, they were subject to tax relief. This means you will not be refunded the exact amount of contributions you paid into the scheme, as we need to deduct the tax you would have paid.
So, a 20 percent tax is taken from your refund.
When can I claim a refund?
You do not have to take your refund immediately. You can delay payment for up to five years after leaving the LGPS or until age 75 if this is sooner. Your pension fund must pay the refund at that point.
If your refund is paid more than one year after leaving the LGPS, interest is added. The interest rate is 1 percent above base rate on a daily basis, compounded with three monthly rests, from the date you left the scheme to the date the refund is paid.
Important
Delayed refunds
If you claim a delayed refund more than five years after leaving or opting out of the LGPS, there may be an additional tax charge.
How is my refund paid?
Depending on how long you paid into the scheme, LPPA or your employer pays your refund:
Your employer refunds your pension contributions in full and you are treated as though you have never been a member.
As soon as we receive confirmation from your employer, LPPA arranges a full refund directly with you.
Once we receive confirmation from your employer, LPPA arranges a full refund directly with you. Just be aware it can’t be paid until a month and two days has passed since you left or opted out of the LGPS.
If you have previously been an LGPS member, you may be able to delay (defer) taking your pension.
Am I entitled to a refund?
You are entitled to a refund if you leave your job or opt out of the firefighter scheme within 3 months of joining or of being automatically enrolled.
If you leave your job or opt out after three months or have transferred in existing pensions, your pension benefits will become deferred instead. You may be able to then transfer your deferred benefits to another pension scheme, depending on whether your new scheme meets certain conditions. Learn more about transferring out benefits.
How much will I get back?
Before you decide to claim a refund, it’s important to remember that when you paid contributions, they were subject to tax relief. Therefore, you will not be refunded the exact amount of contributions you have paid, as we need to deduct the tax you would have paid otherwise. A 20 percent tax is taken from your refund as well as any National Insurance adjustments.
How is my refund paid?
LPPA or your employer pays your refund directly into your chosen bank account.
Am I entitled to a refund?
You are entitled to a refund if you have contributed to the police scheme for less than two years since joining.
If you have paid into the scheme for more than three months but less than two years, you may also have the option of transferring your police benefits to another pension scheme instead of getting a refund, depending on whether your new scheme meets certain conditions. Learn more about transferring out benefits
How much will I get back?
Before you decide to claim a refund, it’s important to remember that when you paid contributions, they were subject to tax relief. Therefore, you will not be refunded the exact amount of contributions you have paid, as we need to deduct the tax you would have paid otherwise. A 20 percent tax is taken from your refund as well as any National Insurance adjustments.
How is my refund paid?
LPPA or your employer pays your refund directly into your chosen bank account.
How to claim a refund
The first step to claim a refund varies if you are leaving your job or choosing to opt out of the scheme. Please follow the instructions below based on your circumstance.
Leaving your job
- When you let your employer know you’re leaving your job, they notify us so that we can calculate your benefits. If you are eligible for a refund we will calculate your potential benefits.
Opting out
- If you choose to opt out of the scheme, you must fill in an opt out form, which you can download from our website.
- You need to return this form to your Payroll or Human Resources Department.
- After receiving your form, your employer will cancel your payroll deductions and notify LPPA that you have left the scheme. If you are eligible for a refund, we will calculate your potential benefits.
We send you a letter, which confirms the refund value and any deductions we would need to make (such as for tax relief).
Your refund value letter includes a claim form for you to fill in. Please be aware, you can’t claim a refund until one month and one day after you leave your job or opt out of the scheme.
- The easiest way to return your completed form is via our online contact form.
- Remember, if you opted out of the LGPS scheme, you can’t claim a refund until one month and one day after you leave your job or opt out.
Once we receive your completed form, either LPPA or your employer processes your refund and pays this directly into your chosen bank account.
