The State Earnings Related Pension Scheme, also known as SERPS, was first introduced in 1978 as a top-up basic state pension scheme. It’s essentially an additional state pension, which allows retirees to enjoy more benefits as they ease into retirement.
The amount you would receive from SERPS is directly related to what you earned during your years of work. However, you’ll only be eligible for the scheme under strict criteria. In 2002, however, SERPS was replaced by the State Second Pension.
There’s still plenty to learn about the State Earnings Related Pension Scheme, away from all the pension jargon. We’ve created this quick and easy guide for you to follow—read on to find out more.
What Is the SERPS pension?
SERPS, or the State Earnings Related Pension Scheme, essentially allowed retirees to increase their state pension income. This is made possible through building up the additional state pension, which is based on their earnings during their career.
People were given the choice to opt out of the SERPS, however, as enhanced pension through private means is also possible. This is particularly common among individuals who have worked between 1978 and 2016.
SERPS Eligibility
If you’ve reached the state pension age on 6 April 2016 or later, then you will be eligible for the new state pension. This means you will not be receiving the additional state pension.
If you’ve reached the state pension age before 6 April 2016, on the other hand, then you will be getting the additional state pension you are eligible for. You are not required to make a separate claim for the additional state pension. If you have periods wherein you are contracted out of your pension, however, then you will not be eligible for the additional state pension.
The Claiming Process and What You Can Get
If you are eligible for an additional state pension (i.e. you’ve reached the state pension age before 6 April 2016), then you will not have to do anything to claim the additional pension. You will automatically receive the additional pension once you make a claim for your state pension. You will not be required to make a separate claim.
The Pension Service will contact you once you make your pension claim, and they will inform you how much you will be getting. The amount you will receive will depend on several factors, such as your income and how long you have paid National Insurance.
The amount of the additional state pension will also be affected by whether you contracted out of the scheme or if you’ve topped up your state pension between 12 October 2015 and 5 April 2017. Once you are informed of the amount you will receive, you’ll get the additional state pension along with your basic pension in your bank account.
The Bottom Line
Although the SERPS was available to many, many retirees opted out of the scheme and chose to invest in National Insurance rebates. However, those who have SERPS continue to enjoy the benefits, but it can be rather difficult to claim amounts.
With the help of Consumer Reclaim, however, the process will be as straightforward as possible. We specialise in misselling claims and similar concerns, so allow our passionate team to help assist you with your concerns. Contact us today to learn more.