The old State Pension

What is the old State Pension?

The ‘old’ State Pension refers to the contributory state retirement pension system in place for people who reached State Pension age before 6 April 2016:

• men born before 6 April 1951; and
• women born before 6 April 1953.

The old State Pension has two tiers:

• The basic State Pension (BSP) – a contributory flat-rate benefit to which people built entitlement on the basis of their National insurance (NI) record, with 30 ‘qualifying years’ needed (reduced in April 2010 from 44 years for Men and 39 years for women) for the full amount (£169.50 a week in 2024/25). A qualifying year is one in which a person has paid, been treated as having paid, or been credited with, enough National Insurance contributions (NICs) for it to count. People with fewer qualifying years get a proportionate amount.
• The additional State Pension – this depended on the earnings or deemed earnings during their working life since 1978. People built up entitlement through the State Earnings Related Pension Scheme (SERPS) between 1978 and 2002, and the State Second Pension (S2P) from 2002 onwards. It was possible to contract out into a private pension scheme that met set requirements, in return for which the employee (and their employer) paid a lower rate of NI.

The pre-April 2016 system is ‘old’ because the ‘new’ single-tier State Pension was introduced for people reaching State Pension age from 6 April 2016 onwards.

This briefing covers issues with the old State Pension most frequently raised by constituents, including how entitlement was built up, why some people have been underpaid, and the arrangements for those who were ‘contracted-out’ of the additional State Pension.

How the old State Pension evolved

What became the basic State Pension was introduced in 1948. It closely resembled proposals set out in the 1942 Beveridge Report for a contributory flat-rate national minimum pension, on top of which people could build through voluntary action. A range of reforms were introduced in subsequent decades:

• Additional earnings-related provision was introduced in 1961 with the introduction of Graduated Retirement Benefit, and the State Earnings-Related Pension Scheme (SERPS) in 1978. This was replaced by the State Second Pension in 2002.
• Policies such as National Insurance crediting arrangements and reduced contribution requirements were introduced from the 1970s onwards to improve entitlements for women, low earners, those with caring responsibilities and others.
• A variety of uprating arrangements have been used for the basic and additional State Pensions since they were introduced. Regular annual increases linked to prices and earnings growth were introduced in the 1970s. The earnings link was removed in the 1980s and the State Pension was uprated in line with prices. In the 2000s pressure for more generous uprating led ultimately to the introduction of the State Pension triple lock – which ensures the basic State Pension is increased every year by the highest of earnings growth, inflation, or 2.5%. This does not apply to the additional State Pension.

Further reading

Institute for Fiscal Studies, The history of state pensions in the UK: 1948 to 2010, 9 June 2010, section 2

Pensions Policy Institute, The Pensions Primer: a guide to the UK pensions system, 4 July 2024

Department for Work and Pensions, Single-tier pension: A simple foundation for saving, 14 January 2014, annex 1

HM Treasury, Tax benefit reference manual: 2009-2010 edition (PDF), July 2009, section 8