Second State Pension

Second State Pension

A voluntary state pension scheme available to citizens of the United Kingdom. It grants higher payments to pensioners following retirement in exchange for higher National Insurance contributions. Payments are based on average earnings over a pensioner's career. It was created in 2002 to replace the State Earnings-Related Pension Scheme, which offered lower benefits to lower and middle income pensioners.
References in periodicals archive ?
A Members of superannuation pension schemes are automatically contracted out of the Second State Pension (S2P) and pay a reduced rate of National Insurance.
Research by the TUC found that anyone with a long work history will lose out under the singletier pension, which comes into effect in 2016, when the second state pension will be abolished.
The reforms spell an end to "contracting out" of occupational pension schemes, which saw employees and employers on final salary pensions opt out of the second state pension, instead paying their money into their pension scheme while making reduced National Insurance contributions.
The current system includes a basic pension, a second state pension and the ability to top up pension contributions with pension credits.
He said: "Simplifying the system is good, as there is currently the state pension, a second state pension and a system of pension credits.
The increasing cost and commitment the Government has for funding state pensions has bought about one of the recent changes we've seen in pension's law, where the choice to contract out of the second state pension has been abolished.
Some commentators have said that the Government's intention, announced in last month's Budget, to abolish the right for those in a DB to contract out of the Second State Pension in favour of an enhanced flat rate state pension, could kill off the remaining company schemes.
I would like to see the second state pension balanced in favour of women who are left widowed so they are paid in full what they are entitled to.
The value of the basic state pension, even with contributions from a reformed second state pension, will not ensure that all contributors gain an income above means-tested assistance.
But 88% of small firms supported developing the idea of a consolidated state pension which would combine the basic state provision and earnings-related second state pension.
People who go out to work are obliged either to contribute to the second state pension or to contract out by joining a private scheme.