85 year rule for local government pension

The 85 year rule for local government pension members can cut or remove the penalty for retiring early. However, it only helps if you paid into the LGPS before 1 October 2006.

Many members still ask about it. It is easy to misread. In fact, it is not a retirement age. It will not let you stop work early on a full pension. So this guide explains how the 85 year rule for local government pension savers works. It also shows who has protection, and what that could mean for your retirement date.

What is the 85 year rule for local government pension schemes?

The Local Government Pension Scheme (LGPS) covers council staff and other public sector workers in England and Wales. Normally, if you take your pension before your normal pension age, you get a cut. After all, the scheme pays you for longer. The 85 year rule can soften that cut.

You meet the rule when your age plus your years in the LGPS add up to 85. Count both in whole years. If you work part time, your service counts at its full calendar length. In other words, part-timers lose nothing.

The official LGPS member site says the same. However, the rule is not a way to retire. Instead, it is a test. It tells your fund whether to cut your pension when you take it early.

Here is how the sum works.

Age	Years in the LGPS	Total	Meets the sum?
60	25	85	Yes
62	23	85	Yes
60	24	84	No
57	28	85	Yes, but you are under 60

The last row matters. The sum is only half the story. For example, your date of birth and your pay dates also play a part.

Why did the government remove the 85 year rule for local government pension members?

The rule ended on 1 October 2006. At the time, the government said it was unfair on grounds of age. A House of Commons Library briefing sets out those concerns. Cost played a part too.

However, a sudden end would have hit long-serving staff hard. So the government added safety nets. As a result, some members still gain today, even though the rule shut to new joiners long ago.

Who has protection under the 85 year rule for local government pension members?

You must have joined the LGPS at some point between 1 April 1998 and 30 September 2006. If you joined on or after 1 October 2006, the rule does not apply. Next, you must be 60 or over when your pension starts. Finally, your age plus service must reach 85.

How much protection you get depends on when you turned 60. Here is a broad guide.

When you turned 60	Protection
By 31 March 2016	Full protection on all benefits
1 April 2016 to 31 March 2020	Full on benefits to 31 March 2008. Part cut on later benefits
On or after 1 April 2020	Full on benefits to 31 March 2008 only. Full cut after that

This is a summary. Your fund will confirm your exact position. Even so, the trend is clear. The protection has faded for years. Today, most members who reach 60 fall into the last row.

Deferred members do not miss out. Say you left the scheme but kept a deferred pension. Your age still rises each year, so your total can still reach 85 later.

Age 55 to 60: why the 85 year rule does not always help

You can ask to take your LGPS pension from age 55. At 60 or over, any 85 year rule protection applies by default. You do not need your employer's consent.

Between 55 and 60, however, things change. The rule does not apply by default, so you face the full cut. Your employer can choose to switch it on. That choice may cost them money. As a result, many employers say no.

Three other routes work differently:

• Flexible retirement. The rule covers the pension you have built up to the day you first take it, even under 60. It does not cover anything you build later.
• Redundancy at 55 or over. At present, you get your pension straight away with no cut. However, you get no boost either.
• Ill health retirement. You get your pension straight away with no cut. You may even get a boost.

How big is the cut without the 85 year rule?

If no protection applies, your fund cuts your pension. It uses official actuary tables. The earlier you start, the bigger the cut. Clwyd Pension Fund's August 2026 factsheet gives these figures.

Years early	Cut to yearly pension	Cut to automatic lump sum
1	5.0%	2.0%
3	13.9%	5.8%
5	21.5%	9.4%
7	28.1%	12.9%
10	36.6%	18.0%

Let us turn that into pounds. Say a slice of your pension is worth £10,000 a year. Start it three years early and the cut is 13.9%. That is £1,390, so you keep £8,610 a year. Start it five years early and the cut is 21.5%. That is £2,150, so you keep £7,850 a year.

These cuts last for life. So it pays to know if the 85 year rule for local government pension benefits covers you. Factors can change, so ask your fund for current figures.

How the 85 year rule for local government pension benefits treats each slice

Your LGPS pension is not one block. Instead, it has layers. Each layer has its own rules.

• Up to 31 March 2008: a final salary pension, plus an automatic lump sum.
• 1 April 2008 to 31 March 2014: a final salary pension at a different build-up rate.
• From 1 April 2014: a career average (CARE) pension.

Say you turned 60 on or after 1 April 2020. The 85 year rule then covers the first layer only. The cut on the second layer runs to age 65. Meanwhile, the cut on the CARE layer runs to your normal pension age. That age matches your State Pension age, and it is never below 65.

Worked example: retiring at 60 with 31 years in the scheme

Take a sample member who joined the LGPS in June 1995. They retire at 60 on or after 1 April 2020. With 31 years in the scheme, their sum comes to 91. So they meet the rule.

Slice of pension	Service dates	Cut at 60?
Final salary pension and lump sum	To 31 March 2008	None. Full protection
Final salary pension	1 April 2008 to 31 March 2014	Yes, for the five years to age 65
CARE pension	From 1 April 2014	Yes, for the years to normal pension age

In short, the rule shields a slice, not the whole pension. Many members expect their whole pot to be safe. Instead, they find only the oldest layer is. That is why you should ask your fund for a full estimate before you pick a date.

Does the 85 year rule for local government pension schemes apply if you joined after 2006?

No, it does not. If you take your pension before your normal pension age, you face the full cut. For example, a member who joined in 2015 has CARE pension only. Any early start brings a cut.

That is not the end of the road, though. The redundancy and ill health routes still work as above. Also, check any old LGPS service. A job you held before October 2006 could still give you some protection.

Scotland and Northern Ireland, meanwhile, run their own schemes. Their rules look similar, but the detail differs. This guide covers England and Wales.

Other changes that could affect when you retire

Two other changes sit alongside the 85 year rule for local government pension protections. Both deserve a watch.

First, your normal pension age in the LGPS follows your State Pension age. If State Pension age rises, so does yours. Our guide on how to avoid being caught out by changes to the State Pension explains more.

Second, the earliest age you can take a pension will rise from 55 to 57 on 6 April 2028. You may keep the old age if you joined the LGPS before 4 November 2021. However, the government has not yet said if the LGPS rules will let those members start before 57. So watch for news.

Common mistakes members make with the 85 year rule

The same slips come up again and again. Here are the main ones.

• Treating it as a retirement age. It is not. It only decides if a cut applies.
• Assuming it covers the whole pension. As the worked example shows, it often covers only the oldest slice.
• Forgetting the employer's say between 55 and 60. Without their yes, you face the full cut.
• Counting only the days you worked. Part-time service counts in full, so do not sell yourself short.
• Ignoring old deferred pensions. A pension from an earlier council job may carry its own protection. So check every pot.
• Skipping the estimate. Your fund can give exact figures. Without them, you are guessing.

A small slip here can cost thousands over a retirement. For that reason, check each point against your own records. Dig out old payslips and scheme statements. Then compare your dates with the tables above.

Should you take your LGPS pension early?

There is no single right answer. On the one hand, retiring early gives you time. On the other hand, you accept a smaller pension for life. You could also face a gap before your State Pension starts.

Before you decide, ask your fund for a benefits estimate. It should show the figures with and without 85 year rule for local government pension cover. Then weigh them against your other savings, your tax and your plans.

A regulated adviser can look at the whole picture. For instance, they can compare taking your LGPS pension now with waiting. You can find a regulated financial adviser through Regulated Advice.

Frequently asked questions

Does the 85 year rule for local government pension still exist?

Yes, but only as a protection. It ended on 1 October 2006. However, members who paid in before that date may still gain.

What age can I retire with the 85 year rule?

The rule is not a retirement age. Instead, it can stop a cut to your pension if you start it from 60 and you have protection.

Does part-time work count towards the 85 year rule?

Yes. Part-time service counts in full. So a part-time career does not hold you back.

Does the 85 year rule apply to a deferred pension?

It can. For example, say you left the LGPS but kept a deferred pension. Your age keeps counting. Ask your fund to check.

Do I need the 85 year rule if I take redundancy?

Not usually. At 55 or over, you currently get your pension straight away with no cut if you take redundancy.

 

Final summary

The 85 year rule for local government pension members ended in 2006. However, it still shields some benefits for people who paid in before then. To use it, your age plus service must reach 85, and you must be 60 or over. Protection also fades the later you turned 60.

So check your dates, ask for an estimate and look at each slice of your pension. Also, remember that your employer decides between 55 and 60. Finally, talk to a regulated adviser before you commit. After all, an early retirement cut lasts for life.

This article is for general information only and is not personal advice. Pension rules can change, and your own position depends on your dates of service. Please confirm details with your pension fund. Taking your benefits early can cut what you receive.