Police Pension Scheme explained

What is the Police Pension Scheme?

The Police Pension Scheme is similar to other public sector pensions in that it is unfunded. This means that the employer pays pension benefits when they become due, rather than building up an investment fund to draw on.

Upon retirement, members of the Police Pension Scheme will receive a monthly income for the rest of their lives. 

Police Pension Scheme: which scheme applies to me?

There are three different schemes:

• The Police Pension Scheme 1987, open to members who joined before 6 April 2006
• The New Police Pension Scheme 2006, for those who joined between 6 April 2006 and 31 March 2015
• The Police Pension Scheme 2015, for those who have joined since 1 April 2015

The scheme introduced in 2015 is a Career Average Revalued Earnings (CARE) scheme. Whereas the previous schemes are 'final salary' schemes, paying an amount based on your salary at retirement, the 2015 scheme pays an amount based on your averaged salary throughout your time in the scheme.

Many police officers have membership of more than one police pension scheme.

How much do I contribute to my Police Pension Scheme pension?

Contributions under the 2015 scheme

Under the current scheme, introduced in 2015, the amount you contribute depends on how much you earn.

The more you earn, the higher your contribution rate is. The following rates apply from 1 April 2017 to 31 March 2024.

Contributions under the 2006 scheme

Members pay contributions towards the cost of pension benefits, which are set as a percentage of pensionable pay.

The current contribution rate is 9.5%, but if you are ineligible for ill-health benefits you will pay contributions at a reduced rate, currently 6%.

Contributions under the 1987 Scheme

Like the 2006 scheme, members pay contributions towards the cost of pension benefits, which are set as a percentage of pensionable pay.

The current rate is 11%. If you are ineligible for ill-health benefits you will pay contributions at a reduced rate, currently 7.5%.

When can I collect my Police Pension Scheme pension?

The normal pension age (NPA) under the current scheme is 60, but you can choose to take your pension at any time after you turn 55. 

In this case, the amount you receive will be reduced, to reflect that fact that your pension will be paid for longer.

If you retire due to ill health, you may be able to retire before the age of 55 without your payments being reduced. 

Retirement age under the 2006 and 1987 schemes

The normal pension age under the 2006 scheme is 55.

If you were a member of the 1987 scheme you can retire on completing 25 years' service if you are 50 or over. If you've completed 30 years’ service, you can retire at any age.

If you have less than 25 years' service, the retirement age depends on your role in the police force. For constables and sergeants, it's 55; the same goes for inspectors to Chief Supt in the Metropolitan Police.

For Commanders or Dep. Assistant Commissioners in the Metropolitan Police with less than 25 years’ service, the retirement age is 57. In all other cases, it's 60.

How much will my Police Pension Scheme pension pay in retirement?

2015 scheme

Each year 1/55.3th of your pensionable earnings is added to your pension pot. There is no maximum length of membership or limit on benefits.

For as long as you are an active member of the scheme, your pension balance will go up each year by the rate of inflation (as measured by the Consumer Price Index) plus 1.25%.

Example

Here's how your pension would build up over two years, assuming your pensionable pay starts at £21,000:

Year 1: £21,000/55.3 = £379.75

Year 2: CPI for the previous year was 2%, so pot has grown to £392.09 (an increase of 3.25%). Salary has risen by 1% to £21,210, meaning £383.54 will be added to your pot (£21,210-55.3), taking it to £775.63 in total.

2006 scheme

Each year 1/70th of your pensionable earnings is added to your pension pot, up to a maximum 35 years. 

A separate lump sum is also payable. The lump sum is four times the annual pension.

Example

Your final pensionable pay is £30,000 and your pensionable service is 21 years.

Your pension = £30,000 x 21/70 = £9,000 per year (index linked after the first year).

Your lump sum = £30,000 x 21 x 4/70 = £36,000 (tax free).

1987 scheme

This final salary scheme is based on 1/60th of your earnings for the first 20 years and 2/60th for each year of pensionable service after 20 years, up to a maximum of 30 years.

Example

Your final pensionable pay is £30,000 and your pensionable service is 25 years (of which 20 years is paid at 1/60th and 5 years is paid at 2/60th).

Your pension = £30,000 x 30/60 = £15,000 per year (index linked after the first year if you are over 55).

What happens to my Police Pension Scheme pension when I die?

Your police pension will pay out to your surviving spouse or civil partner upon your death. There are different rules depending on which scheme you are a member of. 

2015 scheme

When you die, a pension will be paid to your surviving spouse, civil partner or declared partner for the rest of their life.

The pension payable generally is 50% of your pension entitlement at the date of your death.

If you die while serving (and your service was at least 12 months) and are an active member of the scheme, a lump sum death grant will also be payable. This is three times your final pay.

2006 scheme

If you die in service, and have at least two years’ qualifying service, your spouse, civil partner or declared unmarried partner is entitled to a pension worth 50% of the ill-health pension that you would have received if you had been permanently disabled for regular employment at the time of your death.

A lump sum death grant of three times your annual pensionable pay at the time will also be payable.

If you die after leaving the police service or while receiving a police pension under the 2006 scheme, your spouse or civil partner is entitled to a pension worth 50% of your pension entitlement at the date of your death. 

For a pension to be payable to a partner who isn't your spouse or civil partner, you must have completed and sent to the police authority a joint declaration form to confirm that certain criteria apply. These include that you have lived together for a period during which your partner has been financially dependent on you, or both of you have been financially interdependent.

1987 scheme

When you die, your surviving spouse or civil partner will receive a pension typically worth half of your pension entitlement. This will continue until they remarry, form a new civil partnership or cohabit with a new partner. Surviving cohabitees who were not married to nor in a civil partnership with an officer are not entitled to a pension.

If you die while serving, and were an active member of the 1987 scheme at the time of death, a lump sum death grant of twice annual pensionable pay will be paid to your surviving spouse or civil partner. If there is no surviving spouse or civil partner, it will be paid to your personal representative – usually the executor of your will.