State pension reform

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State Pension Reform

The State Pension is a payment made every four weeks by the Government.  

On 6 April 2016, the Government introduced a new single-tier State Pension for people reaching State Pension Age on or after this date, referred to as the new State Pension. This replaced the existing basic and additional State Pension, however if you reached State Pension Age before 6 April 2016 any State Pension due to you will be calculated using the old State Pension rules. 

Further information about your State Pension eligibility can be found on the Government website.

Under an arrangement called the "triple lock", the State Pension goes up each year by either 2.5%, inflation, or earnings growth - whichever is the highest figure.

From April 2025, following a revision, the earnings link is expected to make the State Pension worth:

  • £230.30 a week for the full, new flat-rate State Pension, (for those who reached State Pension Age after April 2016).
  • £176.45 a week for the full, old basic State Pension, (for those who reached State Pension Age before April 2016).

For further information about the PLSA’s view on the future of the State Pension, alongside the overall adequacy of the pension system, please see our latest Five Steps To Better Pensions report.

RELATED DOCUMENTS

Five Steps to Better Pensions: Final Report
16 October 2023
Without policy intervention, most people in the UK will retire with inadequate pension income. Our report sets out five steps for pension reform. If all our proposals are implemented, and the State Pension Triple Lock maintained, people on all income levels will have an improved income in retirement.
READ MORE
Second State Pension age Review: PLSA Response
13 May 2022
In the PLSA response we stated that 68 is already high enough compared to other OECD countries. We also note that having experienced black swan events such as the pandemic and now the cost of living crisis, we need to wait to see the effects on life expectancy, healthy life expectancy and a sustainable State Pension age. We believe that the age set should give each generation a fixed proportion of their expected adult lives receiving the State Pension and at a level that keeps pace with average weekly earnings.
READ MORE

Key facts

The 'Old Age Pension' was introduced in the UK in January 1909. A pension of 5 shillings per week, or 7 shillings and sixpence for a married couple, was payable to a person with an income below £21 a year.

The original state pension qualifying age was 70, and was subject to a means test..

In 1925 the Contributory Pensions Act set up a contributory State scheme for manual workers and others earning up to £250 a year. The pension was ten shillings a week from age 65.

In 1946 the National Insurance Act introduced contributory State pension for all.

The link between state pension increases and average earnings was broken by the 1980 Social Security Act.

2002 saw the switch from from Serps to the State Second Pension scheme. 

In 2010, the Government announced the 'triple lock', meaning that the basic state pension would be uprated by either wages, prices or 2.5per cent; whichever is higher.

The Government released its White Paper on State Pension Reform in January 2013. The paves the way for a simplified, singer-tier state pension.

The Pensions Act 2014 introduced in May 2013 legislates for the new flat rate State Pension.