The new pension scheme

You're referring to the new pension scheme in the UK!

In 2012, the UK government introduced a new pension scheme, known as the "New State Pension" or "New Pension", which replaced the previous State Earnings-Related Pension Scheme (SERPS) and the State Second Pension (S2P).

Here are some key features of the new pension scheme:

  1. Simplified structure: The new pension scheme has a simpler structure, with a single tier of benefits, rather than the previous two-tier system.
  2. Flat rate: The new pension is a flat rate, which means that everyone gets the same amount, regardless of their earnings history.
  3. Basic State Pension: The new pension is made up of two parts: the Basic State Pension (BSP) and the Additional State Pension (AS).
  4. Basic State Pension: The BSP is a flat rate of £129.20 per week (2022-2023) for individuals who have reached State Pension age.
  5. Additional State Pension: The AS is made up of two parts: the State Second Pension (S2P) and the State Earnings-Related Pension Scheme (SERPS). The AS is calculated based on an individual's earnings history.
  6. National Insurance contributions: To qualify for the new pension, individuals need to have paid National Insurance contributions (NICs) for at least 10 years.
  7. State Pension age: The State Pension age is increasing, with women's State Pension age increasing to 65 by 2018 and men's State Pension age increasing to 66 by 2026.
  8. Means-testing: The new pension is means-tested, which means that individuals with higher incomes or assets may have their benefits reduced or even eliminated.

The new pension scheme aims to provide a more sustainable and equitable pension system, with a focus on simplicity and fairness. However, some critics argue that the changes may not provide enough support for low-income earners or those who have not had a consistent earnings history.