Here’s everything you need to know about a SERPS.

State Earnings Related Pension Scheme (SERPS)

SERPS is an Additional State Pension scheme that is meant to supplement the state pension. SERPS also goes by the terms state pension top-up or second state pension.

What is a SERPS?

SERPS is a pension scheme sponsored by the UK government. Those that are entitled to SERPS can have their retirement income increased. According to the current laws, you can apply for a SERPS if you are part of one of the following age groups:

  • Women that are born before April 6th, 1953
  • Men who are born before April 6th, 1951

Those that qualify will get SERPS automatically. The only exception is if you have chosen something called “contracting out.”

How much do I get with a SERPS?

SERPS is deposited into your bank account with your basic state pension. The maximum amount one can get from SERPS is ₤176.41 per week. That does not include your basic state pension. The amount that you might receive from SERP depends on how many years you’ve paid national insurance in full.

How do I find out if I qualify for a SERPS?

To qualify for a SERPS, you need to have reached a state pension age before April 6th, 2016. If you reached state pension age after that date, you would be entitled to a new form of pension called the new State pension.

If you were employed full-time between 1978 and 2002, and you didn’t make any commitment to a personal pension plan or any company pension, then it is very likely that you qualify for a SERPS.

For any employment years after 2002, you will be entitled to the second state pension instead of SERPS. The second state pension (S2P) was created to help those with low incomes or unable to work. Everyone that was making below the lower earnings limit qualified for S2P.

State Pension ICON

Contracted out of SERPS?

If you want to check whether you were contracted or not from SERPS, you can reach out to your pension provider or check your old payslips.

If you ever opted for a company or a personal pension scheme it is very likely that you got “contracted out” from your SERPS. That’s because of your lower national insurance contributions and because your employer paid directly into your new pension scheme.

By contracting out, your state pension payout will also be somewhat lower as you need 30 years of paying full national insurance contributions to get the highest possible amount you can get.

How do I apply for SERPs?

There is no application process for SERPS. Once you claim your state pension, the Pension Service will assume that you applied for SERPS as well. After reviewing your state pension application, they will let you know how much you are entitled to.

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