Basic Pension
Your National Insurance (NI) contributions have been earning you the right to receive a state basic pension when you reach national retirement age. If you have not paid enough NI you may receive a lower pension than someone who has but if you have been out of work you will normally be credited with contributions as if you had been paying them. If you are behind in your payments it may be possible to make additional voluntary payments. Your local DSS can advise you on this.
Additional State Pension
If you are employed, but not self employed, you may be building up the right for an additional state pension that is linked to your average earnings over part or all of your working life. You do this by making contributions through your employer's payroll. Prior to 6 April 2002, this additional state pension was called SERPS (State Earnings Related Pension Scheme) but SERPS has now been relaced by the 'Second State Pension'.
The Second State Pension operates in a similar way to SERPS. The key differences are that future entitlement will be based upon a new formula and many people who would not have been eligible for SERPS may now be eligible for the Second State Pension. In particular, those who are not working because they are caring for young children or elderly relatives or are not working due to long term sick leave or disability may now qulaify for the Second State Pension.
Many employees have 'contracted out' of SERPS in favour of getting benefits from their Occupational or Personal Pension Schemes instead. The current Government also intends to encourage you to contract out of the 'Second State Pension' by using an Occupational or Company Pension, Personal Pension or Stakeholder Pension.
General
Personal
Stakeholder
Occupational or Company
AVCs
Annunities
State Pension Scheme
