UK Pension Provision

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UK Pension Provision falls into three major divisions:

State Pensions
Occupational Pensions
Individual Pensions

Contents

1 State Pensions

1.1 State Old Age Pension (SOAP)
1.2 Additional Pension
1.3 Other State Provision

2 Concepts

2.1 Tax Advantages
2.2 Approval
2.3 Compulsory Purchase Annuities

3 Occupational Pensions
4 Individual Pensions
5 See also

State Pensions

The state provides basic pension provision to prevent poverty in old age. Men over 65 and women over 60 are entitled to claim.

State Old Age Pension (SOAP)

Qualification is based on national insurance contribution history. Age Addition was introduced in 1971 with 25p per week added to the State Pension for people aged 80 or over.

Additional Pension

Graduated Pension

State Earnings-Related Pension Scheme (SERPS) From 1978 to 2002. Qualification based on mid band earnings.

State Second Pension From 2002 onwards.

Other State Provision

Concepts

Continuation of earnings.

Tax Advantages

Growth free from capital gains tax, corporation tax and income tax. Proceeds exempt from inheritance tax.

Approval

To gain the tax advantages the scheme must seek approval from the HMRC.

Compulsory Purchase Annuities

An annuity purchased with pension scheme proceeds taxed as earned income.

Occupational Pensions

Types:

Old Code
Defined benefit DB
Money purchase DC
Executive pension plans EPPs
Small self administered schemes SSASs
Funded unapproved retirement benefit schemes FURBS
Unfunded unapproved retirement benefit schemes UURBS

Individual Pensions

Types