What is a SERPS Pension?

The State Earnings Related Pension Scheme (SERPS) is a government-run pension programme in the United Kingdom. It provides additional pension income to workers who have contributed to the scheme. This supplemental pension is based on a worker's earnings and the number of years they have contributed to the scheme.

The State Earnings Related Pension Scheme has now been replaced with the State Second Pension.

SERPS Background

SERPS was introduced in 1978 and replaced the previous graduated pension scheme. It was designed to provide a more generous pension for workers, especially those on lower incomes. It was also meant to help bridge the gap between the basic state pension and the pensions provided by private pension schemes.

Opting out of SERPS

To be eligible for a SERPS pension, workers must have paid National Insurance contributions while they were working. SERPS was not available to those who were self-employed. The amount they receive will depend on their earnings and the number of years they have contributed to the scheme.

Many people chose to opt out of SERPS and some workplace pensions would opt you out automatically. Opting out meant that your National Insurance Contributions were re-directed into an alternative pension scheme. This usually meant that you would end up with a larger pension pot than the one you would have received from your SERPS pension.

If you think you may be entitled to the State Earnings Related Pension Scheme, it's important to track down any lost pensions and claim your benefits. This can be done by contacting the Pension Service and providing information about your National Insurance contributions and earnings.

Was I opted out?

If you’re unsure whether or not you chose to opt out of SERPS, or if you were opted out automatically, a reputable advisor should be able to help you find this out.

Tracking down lost pensions can be a complex process, but it can be well worth the effort. The Pension Tracing Service is an impartial service to help locate your lost pensions. We then offer advice so you understand what you can do with them.

How will SERPS affect my State Pension?

Under the basic state pension, you must reach the current state pension age of 66 before you can start receiving your pension payments. However, if you have enough qualifying years of NI contributions, you may be able to retire earlier and start receiving your SERPS pension at a younger age.

It's important to note that the SERPS scheme is no longer in operation. It was replaced by the State Second Pension (S2P) in 2002. The S2P was then replaced itself by the new state pension in 2016. However, if you were a member of SERPS before these changes were made, you may still be eligible to receive SERPS pension benefits.

If you reached state pension age before 6 April 2016, you qualify for the old basic state pension. Under the old state pension, you may be eligible to receive an extra payment in the form of additional state pension. If your state retirement age falls after 6 April 2016, you qualify for the new state pension.

Once you start to claim your state pension, any SERPS pension or S2P benefits you’re entitled to will be paid automatically.