LGPS market value up nearly 25 per cent in a year

The increase, of £64.6bn, brought the total market value of the LGPS to £337.1bn, which DLUHC attributed to the improvement in the financial markets since the low point of the pandemic.

Income also rose by £1.3bn (8.4 per cent) to £17.3bn, with a marked increase of 34.3 per cent in employer contributions on the back of early payments made following the triennial review. Employer contributions amounted to £10.3bn, up £2.6bn when compared with 2019-20.

By contrast, though expenditure was also up, it only amounted to a £200m increase over the previous year, a 1.2 per cent rise bringing the total to £13.6bn.

Expenditure on benefits rose by the the same amount, constituting a 1.5 per cent increase, with the majority (£9.2bn) of the £11.1bn total being spent on pensions and annuities, while expenditure on lump sums paid on retirement declined by £200m to £1.4bn, representing a 10.9 per cent fall.

The drop was partly explicable by a decrease in the number of LGPS members retiring. There were 82,936 retirements from the scheme in 2020-21, a fall of 6,070 or 6.8 per cent compared with 2019-20.

There were similar declines in the number of members having their deferred benefits paid early (5.3 per cent) and leaving the scheme due to normal retirement (4.5 per cent), while the number leaving the LGPS due to redundancy fell by 1,836 to 5,989, representing a 23.5 per cent decline.

The LGPS in England and Wales encompassed 6.1m members at the end of March 2021. Of this number, 2m are employees who still contribute to the scheme, 1.8m are pensioners, and 2.3m are former employees who are entitled to a pension at some time in the future.