Additional pension contributions
What are additional pension contributions (APC)?
An APC is a contract to buy a set amount of extra annual pension which is added to your LGPS pension account.
If you’re in the main section of the LGPS, you can choose the amount of APCs you want to buy. You can also pay it off as a one-off lump sum or as regular monthly payments.
You can’t buy extra pension if you’re in the 50/50 section of the LGPS.
How much does it cost?
You can currently buy up to £8,344 a year (2024/25 rates) of extra annual pension. This limit changes each year. As long as you don’t go over this limit you can choose how much you’d like to pay.
You’ll then get this extra pension on top of your normal LGPS benefits every year for life.
The cost of buying extra pension depends on:
- how much annual pension you want to buy
- whether you want to pay by lump sum or spread the cost monthly
- your age when you apply.
The best way to get an estimate of how much it will cost is by using the LGPS extra pension calculator.
How can I pay?
You can either pay monthly or as a one-off lump sum. If you’re less than a year from your NPA, you can only pay by lump sum.
Regular monthly payments
If you’re paying monthly, you can buy extra pension at any time up to a year before your normal pension age (NPA).
The shortest period that you can spread APC payments over is 12 months.
You decide how long you want to pay the extra contributions for. Although it must be for a number of whole years and finished by your NPA.
We’ll take your extra contributions from your pay, like your normal pension contributions before your tax is worked out. If you pay tax, you’ll get tax relief automatically through the payroll. Tax relief is available on all pension contributions up to 100% of your taxable earnings.
Paying a one-off lump sum
As long as you’re still paying into the LGPS, you can buy extra pension with a one-off lump sum, any time before the age of 75. There are two ways that you can do this:
- through your pay
- directly to us – you’ll need to arrange tax relief with HMRC. You can do this through your self-assessment tax return or by contacting HM Revenue and Customs. You can read more about tax on your private pension contributions (link) on the HMRC website.
At the end of every scheme year, we’ll add the extra pension that you’ve paid for in that year to your pension account. We’ll pay the extra pension you’ve bought at the same time as your main LGPS pension benefits. These will increase in line with the cost of living, both before and after you take your pension.
The amount of extra pension bought provides benefits for you only. It’s not used in the calculation of any survivor’s or children’s pension.
You can find more information in our ‘Increasing my pension benefits’ guide.
How to apply
Please fill in the ‘Additional pension contribution’ form and send to your employer. Once you’ve printed out the results of the calculator, please send a copy of both forms to us at pensions@westnorthants.gov.uk
