Until 5 April 2016, some pension schemes (defined benefit (DB), defined contribution (DC) or hybrid) could 'contract out' of the additional state pension, while others were 'contracted-in'.
Between 6 April 2002 and 5 April 2016, the additional state pension was the pension arising under the State Second Pension (S2P); prior to 6 April 2002, it was the pension arising under the State Earnings Related Pension Scheme (SERPS).
On 6 April 2016, the additional state pension disappeared. The government combined the basic state pension and the additional state pension into a single-tier state pension, whereby individuals earn a flat rate of state pension based not on their earnings but on the number of years during which they paid national insurance contributions (NICs). This state pension reform resulted in the abolition of contracting-out. For further information, see 'Abolition of DB contracting-out from 6 April 2016' below.
If an individual was 'contracted-in' to the additional state pension through their scheme, they received an additional earnings-related pension from the state on top of their basic state pension. If an individual was 'contracted out' of the additional...
To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.
**Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisNexis services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
The Pensions Regulator (TPR) has published guidance for trustees and scheme managers on artificial intelligence (AI) in pension schemes. It explains...
This week's edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers....
In the Autumn Budget 2026, delivered on 28 October 2026, the Chancellor of the Exchequer, John Healey MP, announced: (i) the ‘adjusted triple lock’...
Pensions analysis: The Pensions Ombudsman has rejected a complaint about a return of contributions. Martin Scott of gunnercooke LLP looks at the...
What does ‘contracting-out’ mean for pension lawyers?Interaction with the additional State pensionBefore 6 April 2016, there were two levels of State pension provision:•the basic State pension—this was a flat rate broadly based on the amount of National Insurance Contributions (NICs) a person paid
Anti-frankingThe conceptIt used to be the case that contracted-out salary-related (COSR) schemes could revalue a deferred member's guaranteed minimum pension (GMP) without increasing the overall deferred pension. The pension in excess of the GMP was effectively reduced so that the overall deferred
If a rentcharge is shown as being informally exonerated on title information, does this apply to the current registered owner? Or does the informal exoneration only apply to the parties to the document which informally exonerated the rentcharge?This Q&A considers the situation where, at some point
Strike out—making an application to strike out a statement of caseA strike out order can be made either following an application by the parties or on the court's own initiative. This Practice Note deals with the scenario of the order being made following a party's application.Making an application
0330 161 1234