Pension Planning - Additional Pensions

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Additional Pensions

Additional Pensions are restricted to employees who earn above a lower earnings limit and are not contracted out of this state scheme, and for people who are not earning because they are caring for either young children or sick people, will build up additional pension.

Additional pension is also available for those who are sick or disabled but have paid National Insurance contributions for at least one tenth of their working life. Additional pensions are now built up through a second state pension that is also known as S2P, before they were put together through a State Earnings Related Pension Scheme, SERPS.

The SERPS was originally planned to provide pensions linked to your earnings, therefore a well-paid job would result in a bigger pension than a low paid one. The maximum SERPS pension available, depending on when the individual retires, could be as much as £117 per week.

The S2P has been designed to improve additional pension if income is low, or if you have had to take time out from work due to caring responsibilities or health problems.

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