The Pensions Guide


Pensions Knowledgebase and Glossary

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SERPS While you or your spouse have been working, you may have been contributing to the State Earnings Related Pension Scheme (SERPS) as well as to your basic State Pension.
From April 2002, State Second Pension reformed SERPS to provide a better additional State Pension for low and moderate earners, and to extend access to certain carers and long-term disabled people.
Scheme providers Financial services companies wishing to register as a stakeholder pension scheme provider should obtain an application pack.
Self Assessment Self Assessment is a system that some people use to report their income and ‘capital gains’ (profits on the sale of certain assets) to HM Revenue & Customs (HMRC), or to claim tax allowances against their tax bill.
It involves completing a paper or online form called a Self Assessment tax return.
Self-employed If you are self-employed, you are not covered by the State Earnings-Related Pension Scheme (SERPS) or the State Second Pension.
It is important you look at your pension options and start planning for your retirement income as soon as possible.
Self-employed Pensions If you’re self-employed you make class 2 National Insurance contributions. These will entitle you to the basic State Pension, but not the additional State Pension.
If you want to receive more than the basic State Pension when you retire, you might want to consider starting a personal or stakeholder pension scheme.
Social security agreements If you are going to another country in the European Economic Area (EEA) or a country which has a social security agreement with the United Kingdom (UK), you might be able to get a benefit.
If you are coming from one of these countries you might be able to get a benefit from that country or a benefit the UK provides.
Social services Social services can help you continue to live independently in your own home. If appropriate, they can also advise you on moving into sheltered housing or a residential home.
Stakeholder Pensions Stakeholder pensions are a type of personal pension. They have to meet certain government standards to ensure they are good value.
Stakeholder pensions are open to everyone and may be worth looking into if you are self-employed or if your employer doesn’t offer a company pension.
They allow you to contribute as little as £20 a month. You don’t have to be working to contribute to a stakeholder pension, and you don’t have to contribute every month if you’re unable to.
With stakeholder pensions, you can start receiving an income from the age of 50 (increasing to 55 by 2010). You get tax relief on stakeholder pension contributions – up to the Annual Allowance.
Starting to receive the State Pension When you reach State Pension age you don't automatically stop paying Income Tax but your tax bill may go down. You need to tell your Tax Office - in advance if possible - when you retire so you don't pay too much tax.
State Pension You can build up rights to the basic State Pension if you pay, are treated as having paid, or are credited with, National Insurance contributions.
State Pension age The State Pension age is 65 years old for men and 60 years old for women. However, the State Pension age for women is changing - it will rise gradually from age 60 to 65 from 2010 to 2020.
Your State Pension age is different from your retirement age.
Your retirement age, that is the age at which you choose to retire, is not bound by law, whereas your State Pension age is the legal age at which you can start claiming your State Pension.
State Pension deferral This means putting off claiming your State Pension when you reach State Pension age, or choosing to stop claiming it after having claimed it for a period.
From 6 April 2005 you may be able to get more extra weekly pension or the choice of a one-off taxable lump sum payment when you do finally claim.
This change is designed to give you more choice in how and when you retire by making it more attractive to delay taking your State Pension.
State Pension forecast If you want to know how much State Pension you can expect to receive (in today's money values), apply for a State Pension Forecast.
State Second Pension State Second Pension (also known as additional State Pension) is paid in addition to the basic State Pension.
Until April 2002, it was usually known as SERPS and depended solely on the National Insurance contributions you paid as an employee.
From April 2002, State Second Pension reformed SERPS to provide a better additional State Pension for low and moderate earners, and to extend access to certain carers and long-term disabled people.
Statutory Sick Pay (SSP) Paid by your employer for up to 28 weeks if you were sick for at least 4 days in a row.
This is including weekends and Bank Holidays, employed when you became sick and earning enough, on average for it to be relevant for NI purposes.
Suspension order This is an order made by the Occupational Pensions Regulatory Authority (OPRA).
It stops a named person from using their powers or carrying out their duties as a trustee of any occupational pension scheme covered by the order. The named person will get back these powers if the order is removed.

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