FOR ADVISERS ONLY
Upper accrual point
The Pensions Act 2007 put in place legislation to reform the State Second Pension so that it will become a flat-rate top-up to the Basic State Pension by 2030.
The National Insurance Bill has brought forward this change and these changes will start in the 2009 tax year when the upper accrual point is established.
The upper accrual point is £770 per week (£40,040 pa), the level of the upper earnings limit for the 2008/2009 tax year, and will be frozen in cash terms.
The upper accrual point replaces the upper earnings limit for the purpose of capping entitlement to the State Second Pension. It will be frozen at £770 per week leading to a gradual erosion of earnings-related accruals.
| Weekly amount | Annual amount |
|---|---|
| £770 | £40,040 |