Local Government Pension Scheme (LGPS) and divorce

General information, not advice on your own case. If an LGPS pension is part of your divorce, get it properly valued before you agree anything.

Why it matters

The LGPS covers a huge range of people, council staff, school support staff, and many others, and a full career in it builds a valuable, guaranteed, inflation-linked pension. As with all defined benefit pensions, its true worth is usually higher than the figure the scheme quotes, and dividing it on the headline number alone is where settlements go wrong.

What kind of pension it is

The LGPS is a defined benefit scheme, but it differs from the NHS, teachers’, forces, police and fire schemes in one important way: it is funded. Each administering authority holds real, invested assets behind the promises. Members typically have benefits in more than one part of it:

• an older final-salary section (with an automatic lump sum for the earliest service);
• a later final-salary section;
• a career-average scheme, which all active members now build up in.

A valuable detail: for older service, the final-salary link is generally preserved against your pay when you eventually leave, not frozen at the point the career-average scheme started. That link can be worth a lot and must be captured in any valuation.

Why the value is easy to get wrong: the “funded” myth

The scheme quotes a cash equivalent (CE / CETV), and there is a specific trap here:

“Funded” does not mean the CE is a market value. It is tempting to assume that because the LGPS holds real assets, its transfer value must reflect the market. It does not. The individual divorce CE is calculated using the same standardised, government-set basis as the unfunded public-sector schemes, not the fund’s own investment basis. So the usual caution applies in full: the CE can understate the true value and should not be treated as a market price.

The basis is periodically changed by the government, moving CEs up or down, check the calculation date.

The “McCloud” correction applies, through an automatic adjustment made at retirement rather than a member choice. Whether a given CE already reflects it can be unclear, so where it might matter, get written confirmation from the administering fund.

For an LGPS pension of any real size, an independent valuation by a Pension on Divorce Expert (PODE) is the fair approach.

What happens when it is shared

A Pension Sharing Order gives your ex-spouse a pension in their own right. Here the LGPS differs from the unfunded schemes: the ex-spouse becomes a “pension credit member” but can, if they wish, transfer that credit out to another pension arrangement (subject to timing rules near retirement). By contrast, the armed forces, police, fire, NHS and teachers’ schemes generally keep the share locked inside the scheme. This extra flexibility can matter to the person receiving the share.

Things to watch

• Charges vary by fund. Each administering fund sets its own charges for valuations and for implementing a share; the order should apportion them. Check the specific fund’s scale.
• More than one record. People who have worked for several LGPS employers may have multiple pension records, make sure all of them are found and valued.
• The “85-year rule” and protected retirement ages can allow some older benefits to be drawn earlier without reduction. These rights raise the value being shared, but do not pass to the ex-spouse’s credit, a point to weigh when sizing the split.
• Added pension and AVCs are dealt with as part of, or alongside, the share, make sure they are accounted for.

What to do next

• Not sure whether you need an expert? Try the “Do I need a PODE?” tool.
• Ready to find one? The directory lists verified experts you can approach directly.
• Want the background? See the main guide on how pension sharing works.

July 2026