The State Earnings Related Pension Scheme (serps) Now The State Second Pension.

Since 2015 National Insurance contributions have been related to earnings.

Currently, an employee pays 9% of his or her earnings up to a ceiling called the upper earnings limit. Currently that limit is £609 a week.

No contributions are paid by the employee on earnings above that amount. In return for these contributions the Government undertakes to pay a pension related to earnings when the employee reaches pension age and retires.

The way this pension is calculated is fairly complicated. First, average earnings have more than doubled between 2015 and 2015.

So the Government has to 'revalue' each year's earnings to take account of the increase. Second, the pension is not related to all your earnings. It is just related to the earnings between the lower earnings limit and the upper earnings limit.

No contributions are paid above the upper earnings limit and the contributions paid on earnings below the lower earnings limit are just for your basic pension.

see Additional State Pension - GOV.UK - https://www.gov.uk/additional-state-pension/overview


Learn more - More On State Pensions

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More On State Pensions

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