What is SERPS?
When you retire you will be entitled to claim a government pension which consists of the following components: Basic State Pension.
Upon reaching retirement age as a British citizen you will be entitled to claim your basic state pension, which is approximately £80 per week.
In addition you may have been also paying into a second state pension scheme.
State Earnings Related Pension Scheme (SERPS)
The State Second pension, previously known as SERPS is a top-up pension provided to take additional contributions made through National Insurance, which are paid by all employees.
If you have been working full time, part time over 20 hours per week and in some cases when self employed half of your contributions will have been directed into the SERPS scheme.
In 1988 there was a change to government pension legislation which allowed individuals to move their SERPS contributions into a private pension scheme, and allow private pension providers to sell policies to take SERPS contributions. This was commonly known as contracting out or opting out.
