Government confirms pension scheme reforms to tackle the gender pension gap

The government has announced new reforms coming into force from April to help close the gender pension gap.

Measures include making gender pension gap data reporting statutory and making unpaid additional maternity, shared parental and adoption leave automatically pensionable.

The steps will directly benefit millions of women working in local government who are members of the Local Government Pension Scheme.

Around three-quarters of the scheme’s near seven million members are women and one of the most significant causes of the gender pension gap is due to maternity leave.

Other measures include backdated payments and increased future pension payments to ensure that all surviving partners of eligible members are given the same pension as other survivors regardless of the type of relationship they were in.

Due to issues with the existing regulations, there have been instances where people in same-sex marriages and civil partnerships have received a more generous pension entitlement than those in opposite-sex marriages and partnerships.

Under these new reforms, all discrimination on the basis of the sex of those affected will be removed.

Another reform will remove an age cap currently in place that requires an LGPS member to have died before the age of 75 for their survivor to receive a lump sum payment.

The government is also taking steps to keep people in the scheme by enhancing data collection on why people opt out, in a bid to ensure as many people as possible benefit.

Minister for Pensions, Torsten Bell, said: "For too long, women have been penalised in retirement simply for having children.

"These reforms mean that for millions of women working in local government, taking time out to care for a new baby will no longer cost them their pension security.

"This is about a pension system that works for modern families and properly values the vital contribution of working women across our public services."

TUC general secretary, Paul Nowak, added: "Everyone deserves a decent quality of life in retirement, but the gender pension gap means that too many women are pushed into hardship. 

"It’s not right. That’s why these measures are an important step forward - they will make a meaningful difference for millions of women working in local government, helping them to build up a decent pension.

"It’s now vital we see more action to close the gender pensions pay gap across the whole workforce, including by extending this approach to the rest of the public sector."

Justin Corliss, pension expert at Royal London, commented: “The reforms to LGPS coming into effect in England and Wales from April 2026 will be welcomed, particularly by women, who make up around three quarters of the membership but are often low paid. 

“It’s important public sector pension schemes continue to make sure that the structure of benefits provided aligns with the demographic of their workforce. These changes will help reduce the gender pensions gap by ensuring that a break in employment to provide care to others, including children, does not automatically result in a lower retirement income.  

“Further changes help correct historic inequalities in the amount of pension paid to a loved one on the death of their partner. With most people living beyond age 75, removing the age cap for the death grant to be paid will benefit many people.”