Glossary · UK
What is Additional State Pension (SERPS)?
An earnings-related top-up to the old Basic State Pension, built up by employees before 6 April 2016, originally called SERPS and later the State Second Pension (S2P).
Full Definition
The Additional State Pension is an earnings-related amount that some people built up on top of the old Basic State Pension, for periods of employment before the new State Pension started on 6 April 2016. It began life in 1978 as the State Earnings-Related Pension Scheme (SERPS), which linked the extra pension to a worker's National Insurance contributions and earnings, and was reformed in 2002 into the State Second Pension (S2P), which gave more generous credit to low earners, carers and some people with long-term illness or disability. Only employees could build up Additional State Pension -- the self-employed were never covered by SERPS or S2P. People who reached State Pension age before 6 April 2016 may still be receiving Basic State Pension plus Additional State Pension as two separate elements. For those who reached State Pension age on or after that date, any Additional State Pension already accrued was rolled into a "starting amount" under the new State Pension's transitional arrangements, alongside a deduction for any period spent "contracted out" of SERPS/S2P into a workplace or personal pension, when lower National Insurance was paid in exchange for giving up the additional state entitlement. Unlike the new State Pension, Additional State Pension is not subject to the triple lock in the same way -- it is uprated each year in line with the Consumer Prices Index (CPI) rather than the higher of price, earnings or 2.5% growth.