The decision to reinstate access to the Local Government Pension Scheme (LGPS) for councillors in England marks a significant policy reversal. Announced by Communities Secretary Steve Reed in September 2025, the move restores pension rights removed in 2014, recognising the vital contribution councillors make to public life.

Currently, there are approximately 12,000 councillors across England who could become eligible for LGPS membership under the new rules. However, the impact of this policy will be shaped by the plans for local government reorganisation. Under proposals outlined in the English Devolution White Paper, two-tier county and district councils are being replaced by unitary authorities serving populations of 500,000 or more. This restructuring could reduce the number of councillors in affected areas by up to 90%, with estimates suggesting a drop from 12,000 to just 1,200 councillors. 

This dramatic reduction raises concerns about representation and workload. While fewer councillors may mean lower overall pension costs for councils, those remaining will face significantly increased responsibilities, which might also result in significantly increased allowances and therefore pensions for remaining councillors.  This change is expected to improve the attractiveness of public office, particularly for younger and more diverse candidates, by offering long-term financial security. 

For local authorities, the impact is twofold. Financially, councils will need to budget for employer contributions to the scheme, which may place additional pressure on already constrained resources.

Administratively, pension fund administration teams must prepare for onboarding councillors, ensuring compliance with the LGPS regulations and providing clear guidance on contributions, benefits, and retirement options.

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