LGPS funding level jumps to 122%
Author: LAPF Investments | Published: July 16, 2026
The LGPS saw its funding level jump from 107% in 2022 to 122% in 2025, according to the Scheme Advisory Board’s (SAB) latest figures.
The majority of funds in the LGPS saw an improvement in their funding position – largely driven by an increase in the discount rates used at the 2025 valuation, and secondary contributions paid by employers over the intervaluation period.
Average total contribution rates also fell, dropping from 21.1% per annum to 16.5% per annum. Due to the improved position of most funds, secondary contributions were generally reduced – with many being negative.
Additionally, there were significant improvements in surpluses – rising from £22.1bn to £72.9bn between 2022 and 2025. Average primary rates, meanwhile, decreased from 19.8% to 17.7%.
Reflecting on the findings as a whole, the SAB said there has been an “unprecedented level of interest” in the outcome of this valuation round – in the press, in parliament and beyond.
It added: “This is partly driven by expectations raised by the welcome further increase in funding levels. These improved from 107% in 2022 to 122% in 2025 (using local funding bases). The interest was also driven by ongoing concerns about the amount of funding available to deliver local public services, including education.
“The Board therefore welcomes the decisions made locally to share the benefits arising from the successful management of LGPS funds, and in particular the decrease in average employer contributions from 21.1% of payroll in 2022 to 16.5% of payroll in 2025.
“That we are able to offer such welcome reductions in contribution is evidence that LGPS remains a cost effective and well managed scheme that delivers real value for its members and participating employers.
“In considering the level of reductions possible, funds have had to balance the interests of employers today with their need to protect future members from the uncertain economic and geopolitical times in which we live and no doubt lie ahead.
“The Board is also committed to ‘telling our story’ better and is looking at ways in which we can improve the knowledge base and understanding of the scheme for those participating in the public discourse around the scheme.
“Publishing this report is one early step in that but we expect to produce more informational material in due course.”
