Increasing your pension benefits
If you’re thinking about topping up your pension, there are a few things to consider before making your final decision.
LGPS members
You can increase your benefits through APCs (additional pension contributions) or AVCs (additional voluntary contributions). But they work differently and have their own rules. So, it’s important to understand the differences between them when choosing the best option for you.
The key difference between APCs and AVCs is whether your contributions are used to buy benefits within the LGPS or invested in separate funds outside the scheme.
| Feature | APCs | AVCs |
| Who manages my extra pension? | LPPA on behalf of your pension fund (as your pension administrator) | A third-party provider. |
| Am I eligible? | You can only pay APCs if you’re in the main section of the LGPS (not the 50/50 section). | You can pay into an AVC if you’re in the main or 50/50 section of the LGPS. |
| What happens to my additional contributions? | Your contributions are used to buy extra pension within the LGPS. | Your contributions are invested in separate funds outside of the LGPS. |
| How do I pay? | Either by regular payments or a lump sum. | Regular payments either as a fixed amount or a percentage of your salary. |
| What’s the maximum amount I can pay? | The maximum amount of extra pension you can buy is £8,344 (2024/25 rate). APCs also count towards your annual allowance. | Up to 100% of your pensionable pay (your basic salary used to calculate your pension contributions). AVCs also count towards your annual allowance. |
| Do I get tax relief on my additional contributions? | Yes | Yes |
| Can I stop contributing at any time? | Yes | Yes |
| Can I transfer out my extra pension? | Yes, your APCs are part of your main LGPS pension and can be transferred to a different scheme. See what rules apply | Yes (see AVC section for details on conditions or visit the LGPS website). |
| Can I take my extra pension as a tax-free lump sum at retirement? | Yes, your APCs are included with the rest of your LGPS pension. You can only take up to 25% of your total pension (which includes your main scheme benefits and APCs) as a tax-free lump sum. | Yes, you could take up to 100% of your AVC as a tax-free lump sum as long as you take it at the same time as your main LGPS benefits and it doesn’t exceed: 1. 25% of the overall value of benefits you are taking. 2. The lump sum allowance (£268,275). This may vary if you defer your AVC until age 75. |
| Are there any death benefits? | No, APCs only contribute to your own pension and do not count towards any benefits for your dependents. | Yes, the value of your AVC will be paid as a lump sum to your dependents, if you die before taking your pension. You could use your AVC to increase this benefit and provide extra life cover for them. |
| How will my additional pension increase / decrease over time? | Your extra pension is a guranteed amount, which increases in line with inflation. You will always get the amount of additional pension you have purchased if you retire at your Normal Pension Age (NPA). | The extra pension you receive from your AVC depends on how much you pay in and how well the investments perform. The value could go down as well as up. |
Fire & Police members
If you want to top up your Police or Firefighters’ pension benefits, you can increase your contributions to buy ‘added pension’.
