Pensions in the United Kingdom fall into three major divisions and 7 sub-divisions, including both defined-benefit and defined-contribution:
Basic State Pension
State Second Pension (S2P)
Defined Benefit Pension
Defined Contribution Pension
Group Personal Pensions
Self-Invested Personal Pension
Personal accounts, automatic enrolment and the minimum employer contribution will be new policies joining these from 2012.
Automatic enrolment has been successful but there are a number of myths remaining around the scheme, which professional bodies and companies are working to bust.
The state provides basic pension provision intended to prevent poverty in old age. Until 2010 men over the age of 65 and women over the age of 60 were entitled to claim state pension; from April 2010 the age for women is gradually being harmonised to match that for men. Longer-term, the retirement age for both men and women will rise to 68 by no later than 2046 and possibly much earlier.
The basic state pension, then known as the “Old Age Pension” was introduced in the United Kingdom (which included all of Ireland at that time) in January 1909. A pension of 5 shillings per week (25p, equivalent, using the Consumer Price Index, to £24 in present-day terms), or 7s.6d per week (equivalent to £35 today) for a married couple, was payable to a person with an income below £21 per annum (equivalent to £2000 today), following the passage of the Old Age Pensions Act 1908. The qualifying age was 70, and the pensions were subject to a means test.
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