Funding arrangements of the police pension scheme
At a glance
The police pension scheme is regularly monitored to ensure that there is enough money to pay members benefits both now and in the future. Employers, members and the government all pay towards the scheme to achieve this. Injury awards are paid by your employing police force.
Actuarial valuations
Looking at the long-term scheme health
To make sure the scheme has enough money to pay members’ benefits and that contribution rates remain appropriate, a full actuarial valuation is carried out every four years.
NPCC Pension Podcast - Episode 4
Find out more about how the police pension scheme is funded in this podcast episode.
Note: the contribution information has been updated since the time of filming and the latest information can be found on the website.
What is an actuarial valuation?
An actuarial valuation is a detailed financial review of the scheme. It looks at the cost of the pension benefits being built up and compares this with the contributions being paid by members and employers.
What happens after a valuation
If the results show that the cost of providing benefits has moved significantly above or below the target level, changes may be required. These could include adjustments to:
- Member and or employer contribution rates
- Future benefit build-up for active members
Why this matters
Regular valuations help ensure the scheme remains able to pay the benefits promised under the regulations. They are a normal part of how public service pension schemes are managed and do not affect pensions that have already been built up.
Funding
How does the scheme pay benefits?
Members of the scheme pay contributions each month. Employers also make contributions based on the number of members they have. As the police pension scheme is a public sector scheme, the government also tops up the contributions if there is a shortfall.
The role of the government
The majority of the scheme’s benefits are paid through the contributions members and employers make. The scheme is known as an unfunded scheme. This means that there is no investment pot set aside to pay future pensions. Instead, if the contributions received in a year are not enough to cover the pensions being paid out, the shortfall is paid by the government. If contributions are higher than the amount needed, the excess is returned to the government.
SCAPE discount rate
The SCAPE discount rate is a government-set financial assumption used to help value future public service pension benefits in today’s terms.
It is reviewed from time to time to reflect wider economic expectations, such as long-term growth, and to make sure pension costs are calculated consistently across public service schemes.
When the rate changes, it does not change the pension someone has built up, but it can affect certain calculations, such as transfer values, early retirement adjustments and lump sum options.
The SCAPE discount rate was last reviewed in May 2026. A document covering some frequently asked questions about the 2026 review is available for members who would like more information.
Injury awards
Injury benefits may be payable to police officers who are permanently disabled as a result of an injury received in the execution of duty. You do not need to be a member of the police pension scheme to be eligible to receive an injury award.
As a police officer you do not need to make contributions to be eligible for an injury award. Instead, the full cost of the injury benefit is funded by the employing police force. Injury pensions are paid free of tax from the administrator.
You can find out more details in the injury section.