City councillors have rejected a proposal to include elected members' allowances within the Local Government Pension Scheme (LGPS), citing affordability concerns.
The City of London Corporation's Policy and Resources Committee voted unanimously to support the recommendation from its Civic Affairs Sub-Committee not to apply the LGPS to the Member Allowance Scheme (MAS).
Legislative changes from May 2026 allow councillors to become members of the LGPS in respect of their elected office, making their allowances pensionable. However, the City Corporation had the choice whether to apply these new regulations. This differs from most other local authorities, whose members are automatically enrolled in the scheme.
A report presented to the committee highlighted that if the scheme were applied, the employer contribution would be approximately £225,000 per annum, based on all 125 Members claiming the allowance.
Despite an Equality Impact Assessment noting that not applying the LGPS could disproportionately affect members with protected characteristics who are more likely to experience pension gaps, the committee opted against the proposal. The assessment specifically identified that individuals with disabilities, those from minority ethnic backgrounds, and women are more likely to face a pensions gap. It also noted that people who identify as LGBTQ+ face an earnings and pension gap, and that women are more likely to take career breaks due to maternity, causing disruption to pension contributions.
The current Member Allowance Scheme (MAS) allows members to opt-in to a flat-rate basic allowance of £9,000 per annum, intended to cover costs incurred in undertaking duties. This allowance is noted as being lower than any other London borough. If the LGPS were applied, contributions would be deducted from this monthly allowance using the same contribution bands as other LGPS members, with an expected contribution rate of 5.5% for those who elect to join.
The meeting information does not explicitly state the expected lifespan of the decision not to apply the LGPS to the Member Allowance Scheme. However, it does mention that the Court of Common Council, when agreeing to an uplift in the Member Allowance Scheme in October 2024, agreed that the allowance should be set and reviewed every four years, in the year before an all-out election. The next such election is due in 2029, and it is suggested that it 'may therefore be worth revisiting the issue of applying the LGPS scheme at the same time.'
Public reports pack 22nd-Oct-2026 13.45 Policy and Resources Committee.pdf