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Guide to UK Pensions
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State and other types of Pension Schemes

Before you decide whether a pension is right for you it's important to know about the different types of pensions available. In the UK pensions can broadly be split into three categories:

  • State Pensions - offered by the Government
  • Company or Occupational Pensions - offered by Employers to their staff
  • Personal Pensions - offered by Insurance companies, Finance companies, Banks, Building Societies etc.

The following pages outline these in more detail:

State Pensions Description
Basic State Pension Depends on the number of qualifying years you make National Insurance contributions for. Changes to the Basic State Pension made on 6 April 2010 mean men born on or after 5 April 1945 and women born on or after 5 April 1950 now only need to have:
  • 30 qualifying years to get a full basic state pension
  • 1 qualifying year to get some basic state pension
Parents and carers can also obtain National Insurance credits to build up their qualifying years.
Additional or State Second Pension (S2P) You can qualify for an additional state pension if you are under state retirement age and are:

  • employed and earning over £4,940 (from any one job)
  • looking after children under 12 years old and claiming child benefit
  • caring for a sick or disabled person for more than 20 hours a week and claiming carer's credit
  • a registered foster carer and claiming carer's credit
  • receiving certain other benefits due to illness or disability
Employed people do not usually build up additional State Pension if they are in a personal or occupational pension scheme that 'contracts out' of the Additional State Pension. Until April 2002, the Additional State Pension for employees was called the State Earnings-Related Pension Scheme (SERPS).
Over 80 Pension Unlike other State Pensions, this is not based on National Insurance contributions. You can qualify if you:

  • are aged 80 or over
  • don't get basic State Pension, or your basic State Pension is less than £58.50 a week
  • live in England, Scotland or Wales, and have done so for 10 years or more.

National Insurance Contributions and your earnings (if you haven't contracted out of the Additional State pension) determine what you get under a state pension. Contributions you make while working go straight towards paying for pensions being claimed now, so when you retire your pension will be paid for by the current generation of workers.

For full details of State Pensions, including enquiries about your own state pension entitlements, refer to the UK Government website: www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension

PDF Guides Download the UK Pension PDF Guide here - see our other free PDF guides here

Guide Contents

What is a Pension?
Why do you need a pension?
State and other types of Pension Schemes
Company or occupational pensions offered by Employers
Personal or private pension schemes
Shopping around for a personal pension scheme
Pension FAQs
Where can I go to get more help?

free personal pension advice:
submit our form below today:
name:* tel no:* email:*
house no: postcode:* date of birth:
       
by sumbitting this form you're agreeing to receive a call regarding your pension circumstances from Reid, Scott & Ross.

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