The additional State Pension

If you are an employee, you may be able to build up an additional State Pension on top of the basic State Pension. However, if you are paying reduced-rate National Insurance contributions, you cannot build up your entitlement.

State Earnings-Related Pension Scheme (SERPS)

Up to April 2002, the additional State Pension was called the State Earnings-Related Pension Scheme (SERPS). SERPS was based on your record of National Insurance contributions and your level of earnings as an employee.

State Second Pension

On 6 April 2002, the Government reformed SERPS, creating the State Second Pension to provide a more generous additional State Pension for low and moderate earners, and certain carers and people with a long-term illness or disability. For State Second Pension purposes, earnings up to £11,600 are low earnings and earnings between £11,600 and £26,600 are moderate earnings (for 2004/05). Only earnings on which standard-rate National Insurance contributions are paid (or are treated as having been paid) count for these purposes. (Any SERPS entitlement that has already been built up will be protected, both for those who have already retired and for those who have not yet reached State Pension age.)