State Second Pension Explained
State pensions have over time become more and more complicated. This analysis explains the 'nuts and bolts ' of the State Second Pension.
In April 2016, the basic State Pension was replaced by the new State Pension.
Since that date it is not possible to contract out of the State Second Pension (S2P) using a final salary scheme.
Contracting out using a money purchase or appropriate personal pension/stakeholder plan stopped on 5 April 2012.
This article explains how S2P worked until the new State Pension was introduced. It has not been updated since the 2015/16 tax year.
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.