What is the second state second pension?
Depending on your individual circumstances, you may be entitled to additional State Pension (also called the State Second Pension and formerly the State Earnings Related Pension Scheme (SERPS)). As its name suggests, additional State Pension is paid in addition to the basic State Pension.
Up to April 2002, SERPS was based on your record of National Insurance contributions and your level of earnings as an employee.
On 6 April 2002, the State Second Pension reformed SERPS to provide a more generous additional State Pension for low and moderate earners, and to extend access to include certain carers and people with long-term illness or disability. (Any SERPS entitlement already built up is protected both for those who have already retired and for those who have not yet reached State Pension age.)
The State Second Pension gives employees earning up to £31,800 (in 2009/10) a better pension than SERPS, whether or not they are contracted out into a private pension, with most help going to those on the lowest earningsup to around £13,900 in 2009/10).
When you make your claim for a State Pension any additional State Pension due to you will also be calculated.
As from 6 April 2002 the State Second Pension replaced SERPS, this means that from this date a person who cannot meet the earnings conditions can still get some additional State Pension if they meet certain qualifying conditions. Employees who earn at, or above, the Lower Earnings Limit (£4,680 a year (£90x52) for 2008/09), but less than the Low Earnings Threshold are treated as if they had earnings at the Low Earnings Threshold13,500 a year for 2008/09). This means that, for 2008/09, a person with annual earnings between £4,680 and £13,500 will be treated as if they had earned £13,500 for the purpose of working out their additional State Pension.