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Consumer > Why have a pension? > State pension provision
State pension provision
The State currently provides retirement income to women from age 60 and men from age 65. From 2020 the state pension age will be 65 for both men and women, with the increase for women being phased in gradually from 2010. Retirement income from the State comes in two main forms:
- Basic State Pension
- State Second Pension
The Basic State Pension provides a flat rate payment (not earnings related) to those that have met the minimum National Insurance Contribution requirements. In the current tax year (2008/2009), the Basic State Pension is £90.70 a week for a single person and £145.05 per week for a married couple. If you have had a career break, e.g. to raise children, or have been unemployed for a prolonged period it is unlikely you will receive the full amount.*
The State Second Pension (S2P) is an earnings related pension that replaced the former State Earnings Related Pension Scheme (SERPS) in April 2002. This is designed to top up the Basic State Pension and is based on your earnings, and consequently your National Insurance Contributions, during your working life. It provides most benefit to those on low earnings. **
Some people also qualify for Pension Credits which are a means-tested benefit aimed at ensuring that all pensioners receive a minimum level of income, currently £124.05 a week for a single person and £189.35 for a married couple.
* Currently a woman with a working life of 44 years needs 39 qualifying years for the full Basic State Pension and a man with a working life of 49 years needs 44 qualifying years. The government is proposing to reduce the number of years it takes for people to qualify for a full Basic State Pension to 30. 'Security in retirement: towards a new pensions system, May 2006.'
** There are special rules to allow certain people that are not employed, for example, full time carers or those with long term disabilities, to receive some S2P payments.
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