1/2/2023 0 Comments What a tangled web we weave![]() The idea at the time was the GMP would, in payment, broadly replace the additional State Pension a member was forgoing. In return for this the scheme concerned had from 1978 to promise to pay its members a minimum pension entitlement called a Guaranteed Minimum Pension (GMP) at age 65 for males and 60 for females. ![]() Why don’t we pass the cost of providing the additional State Pension from the taxpayer to pension schemes? As part of this process defined benefit occupational pension schemes were allowed to contract out of the State Pension: the incentive being employers and members paid lower rates of NI contributions. The Government’s thought process behind contracting-out is quite simple. ![]() The State Pension system was therefore based on inequality. There is also an additional State Pension which was earnings-related and to which individuals qualified on the basis of earnings between prescribed limits during their working life.īefore the Government (in more recent years) began to equalise the entitlement ages for State Pension, males had an SPA of 65 and females of 60.30 “qualifying years” of NI contributions or credits would provide the full amount). The basic State Pension is a flat rate pension to which individuals accrued entitlement on the basis of their National Insurance (NI) contribution record (i.e.The State Pension, payable to those who reached State Pension age (SPA) before 6 April 2016, is divided into two elements.
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